CIT

In the light of the dynamically changing tax regulatory landscape, especially for those engaged in R&D activities, it is becoming increasingly important to understand and effectively utilize the available tax credits. In this context, the R&D Tax Credit and the IP Box Tax Credit, both aimed at taxpayers engaged in R&D activities, seem extremely attractive, especially in the context of the recent changes introduced by the “Polish Deal.” However, is it possible to use both of these reliefs at the same time? What benefits might this bring to taxpayers?

With the introduction of the “Polish Deal” on January 1, 2022, there have been significant changes to the regulations governing tax credits. The purpose of these changes is to promote innovation and support research and development (R&D) in Polish companies. Among the new regulations, the most noteworthy is the “relief for support of innovative employees.” This new mechanism is intended to support those companies which, despite employing employees to conduct R&D activities, have incurred losses in a given tax year or their income does not allow full deduction of qualified expenses.

Are you planning to acquire a company or invest in a new business? Every investment decision carries a variety of tax implications that can have a significant impact on the ultimate profitability of your investment. In our latest MartiniTAX blog post, we outline the key tax aspects of structuring business transactions. We analyze the differences between an “asset deal” and a “share deal,” explain the tax implications for sellers and buyers, and discuss CIT, PIT, VAT and PCC tax issues in detail.

Taking advantage of the Polish Investment Zone’s preferences is an attractive option for investors seeking tax benefits, but such benefits are not without risk. Recognition of eligible costs, inability to take advantage of simplified transfer pricing documentation, and potential revocation of support decisions are just some of the issues that can expose entrepreneurs to unexpected complications. In our latest blog post, we examine these risks and the Polish Investment Zone rules to help investors better understand what these preferences may mean for their business operations.

The Polish Investment Zone was introduced by the Act of May 10, 2018 on supporting new investments. This solution, unlike special economic zones, makes it possible to obtain state aid throughout the country. The state aid in question relates to exemption from payment of both PIT and CIT income tax on income generated in connection with the new investment covered by the decision on support. Importantly, the exemption cannot be used by companies forming a tax capital group established or for which the period of operation has been extended since June 30, 2018.

The introduction of new regulations always raises many questions and uncertainties. Above all, we want to know what these changes mean for us and how they might affect our operations. As we begin 2022, Poland has introduced significant changes for investors and companies interested in holding structures. The new concept of the Polish Holding Company (PSH) is a proposal for favorable tax conditions aimed at attracting and retaining capital in our country. Therefore, in the post we will take a closer look at this solution, find out what a Polish Holding Company is, what conditions it must meet and what we need to know about its subsidiaries.

These days, more and more entrepreneurs are thinking about optimizing their tax structure. Properly organized holding structures can bring significant benefits, including significant tax benefits. The Income Tax Law provides a number of preferences for such entities, including tax exemption of income from the paid disposal of shares (stocks) and tax exemption of dividend income.

Taking advantage of the Polish Investment Zone’s preferences requires investors to make a detailed calculation of exempt income and tax credits. These are key steps to effectively take advantage of the available benefits. In our latest blog post, we explain how these calculations should be performed. We discuss issues such as cost imputation, proportional cost imputation in the absence of direct imputation, and how to calculate the public assistance limit. In addition, we explain how the loss arising from new investment affects the calculations. Understanding these principles can help investors take better advantage of the preferences of the Polish Investment Zone.