CIT (Corporate Income Tax) – corporate tax. It is a tax paid on the income of companies and organizational units that have legal personality who have legal capacity and legal capacity. CIT is a type of direct tax.
What is the CIT tax paid on
The CIT tax is paid on income, regardless of the source of income from which it was obtained. In turn, the revenue is considered the sum of revenues reduced by the costs related to obtaining them in a given tax year.
In the case of a loss, i.e. a situation in which in a given tax year the tax deductible costs were higher than the income, the taxable person CIT may reduce his income by the amount of that loss in the next 5 tax years. However, the income reduction can not be higher than 50% of this loss.
The tax obligation in CIT
The CIT tax obligation is divided into two types:
- unlimited – applies to taxpayers who have their registered office or management on the territory of the Republic of Poland. In this case, the tax should be deducted from the total income generated, irrespective of where they are obtained.
- limited – applies to taxpayers who do not have their registered office or management on the territory of the Republic of Poland. In this case, the tax should be paid only on income obtained in the Republic of Poland.
Who is a CIT tax payer?
Who is a CIT tax payer results from the provisions of the Income Tax Act. These are:
- legal entities, including enterprises, foundations, cooperatives, associations, banks, capital companies (joint-stock companies and limited liability companies)
- organizational units without legal personality, with the exception of partnerships, i.e. capital companies in the organization and limited joint-stock partnerships, which have their registered office or management in the territory of the Republic of Poland
- tax capital groups, that is, groups that consist of min. two commercial law companies with legal personality and functioning in capital relationships
- companies without legal personality, but having their headquarters or management in another country, as long as they consider them legal persons, and therefore are subject to tax on their entire income, regardless of where they achieve it.
The following legal entities are exempt from CIT:
- pension funds,
- Investment funds,
- church organizations,
- public benefit organizations,
- companies that operate in special economic zones.
In addition, there are material exemptions that exempt CIT from legal entities or other entities that carry out activities of a certain type. For this reason, the subject exemptions relate to revenues:
- from agricultural activity, with the exception of special agricultural production departments
- from forest management
- resulting from activities that can not be the subject of a legally effective contract
- shipping companies taxed by tonnage tax.