Poland's Council of Ministers reportedly approved the main objectives of the state budget on 28 July 2020, including the plan for the introduction of a new corporate tax regime for certain SMEs based on the corporate tax regime of Estonia. The regime is to be optional and is meant to provide relief for SMEs in response to the effects of the COVID-19 pandemic.
Under the regime, two models will be made available. The first is a comprehensive model under which companies would not be taxed until profits are distributed, similar to the Estonian regime. The second is an investment model under which companies are taxed under the standard corporate regime but are allowed to allocate funds to a special investment account that is fully deductible for corporate tax purposes.
The regime would be available for capital companies with natural persons as shareholders that have annual income lower than PLN 50 million, including stock companies and limited liability companies. Further, such companies would need to have at least three employees and not hold equity in any other company. When elected, the regime is to apply for four years, with a possible four-year extension.
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