CIT

Preparing for the future is one of the key elements of running a successful business. But what will happen to your business after you die? Will your business, which you have worked on all your life, cease to exist? Is there a way to ensure the continuation of your business after your passing? The law offers various options for those who want to secure their businesses for the future, and one of them is the establishment of a successor administrator. In Poland, as of November 2018, entrepreneurs have the option of establishing a successor administrator, who can temporarily run the business after the owner’s death, ensuring the continuation of the business.

Risk management, especially in the area of legal liability, is important in any rapidly growing business. It is important for entrepreneurs to realize the possible consequences of business failures, which can affect their personal financial situation. Accordingly, many companies are looking to reduce their liability through various forms of business transformation. In this article, we take under our microscope the various options available to sole proprietorships – from transformation into a sole proprietorship, to contribution of a sole proprietorship to a newly formed company, to options related to limited partnerships.

As of January 2022, under new regulations, a “pay and refund” mechanism has been introduced in the context of withholding tax (WHT). Have these changes affected your business? Do you understand how this new system works and what obligations have been imposed on payers? If not, this post is dedicated just for you. Understanding the new mechanism is key, as currently payers are required to collect WHT at the basic rates (19% or 20%), even if the conditions for exemption or reduced rate are formally met.

In the area of taxation, especially in the context of international relations, the issue of the application of tax preferences often arises. This concerns, among other things, a situation in which there is an excess of PLN 2,000,000 in payments to foreign entities. Then, according to tax law, it is the payer’s duty to withhold withholding tax (WHT) at the standard rate. However, there is an instrument that makes it possible to exclude this obligation – this is a tax preference opinion. Is it effective and when is it worth using such an option? What are the pros and cons of this option?

In the corporate world, withholding tax (WHT), is often an unavoidable cost associated with doing business. However, there are certain mechanisms that can allow to reduce this burden, including tax preferences. When applying these preferences, the key is to file the right applications and meet specific conditions, which is not always easy in practice.

The essence of the relief for research and development activities is the possibility of deducting from the tax base (income) expenses that constitute qualified costs incurred for the indicated activities. The legislator in the tax regulations has included a closed catalog of expenses that can form the basis for calculating the relief. Thus, a taxpayer under the relief is allowed to deduct from income only those expenses that fall into one of the statutory categories.

The R&D tax credit was introduced by the legislature in 2016, but since then it has gained significantly in attractiveness – the amount of maximum deductions under the credit currently reaches 200% for employee expenses and 100% for other expenses. Over the years, the catalog of expenses eligible for deduction under the relief has also been expanded, which has also increased its popularity.

Conducting research and development (R&D) activities is not only crucial for innovation and business competitiveness, but can also bring significant tax benefits. There is an R&D tax credit in the Polish tax system, which allows for preferential deduction of qualified costs related to this activity. However, many companies are unaware of the important conditions they must meet to take advantage of this relief. One of the most important is the proper documentation and recording of R&D costs incurred. In the following post, we will discuss in detail how this obligation is defined in the CIT Law, how to keep such records and what are the consequences of improper record-keeping. Whether you are new to the world of R&D or already taking advantage of this relief, this post will help you better understand the requirements for recording R&D costs.