POLAND: A new type of tax relief proposed – Special Investment Fund from 2021

Tax burden of entrepreneurs aimed to be reduced

Besides the so-called Estonian CIT, the Polish government has announced a one more new solution for entrepreneurs from 2021, aimed at reducing the tax burden of entrepreneurs. Taxpayers who meet the criteria for entering the Estonian CIT will be able, alternatively, instead of the Estonian CIT, to choose faster settlement of the depreciation of fixed assets thanks to the use of a special investment fund (account).

Special investment fund account needed to be established

In order to use this solution, it will be necessary to open a special investment account with Bank Gospodarstwa Krajowego (BGK) or another bank that will conclude a cooperation agreement with BGK. Subsequently, the taxpayer will be entitled to transfer to this account cash from the profit for the preceding tax year. A write-off made to a special investment fund (account) corresponding to the funds transferred to this account may then be included in the taxpayer’s tax-deductible costs. The taxpayer will have time to spend the funds accumulated on the investment account until the end of the next tax year, or even 3 years if the investment plan is submitted to the head of the tax office.

Estonian CIT model needed to be abandoned

Therefore, the above solution will be used by companies that will abandon the Estonian system and it will enable them to settle the tax depreciation of fixed assets faster. The tax costs will arise in the company even before the appropriate machinery and equipment is purchased. At the same time, taxpayers who chose a special investment fund will be able to use other tax benefits at the same time, e.g. R&D relief, while companies that have switched to the Estonian system will not have such an option.

Unfortunately, due to the shape of the regulations, the solution is addressed only to limited liability companies and joint stock companies, while the shareholders of which are only natural persons.

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*This article is for general information purposes only and does not constitute a legal advice.