Friday, July 22, 2016

Experts: the reduction of CIT to 15 percent. rather little benefit small businesses – Onet.pl

Parliament almost unanimously spoke out on Friday for a reduction of 19 percent. up to 15 percent. CIT for small taxpayers, which implies the government prepared an amendment to the law on personal income tax and corporate tax.

An expert with the Center for the Club of the Jagiellonian Radoslaw rated Baker told PAP that the amendment is a” media firecracker. “

“the message from the government flows so that small businesses are lowering CIT. The problem is that small businesses do not pay CIT, because usually dissipate PIT as a one-man business or acting in the form of a partnership. For the really small companies little will change, “- said Baker.

According to him, not be ruled out, however, negative consequences for budget. “perhaps – after appropriate skalkulowaniu – for companies operating as single entities or as partnerships will be profitable change of legal form. Such a single entrepreneur will be able to open a company o.o. and get two benefits; It will pay 15 percent. tax, but above all not be subject to the Social Insurance “- explained the expert.

” If the rise in income CIT, the government will not be able to assign realize this as a success, because it will increase apparent. This will be due to the fact that some taxpayers will go from + pocket + PIT-esque budget to + pocket “CIT-esque. Will drop in revenue from the PIT, may also influence ZUS, despite an increase in revenues from CIT” – he added.

Main economist of the Confederation Lewiatan Dr Margaret Starczewska-Krzysztoszek noted that according to the government’s tax reduction in the long term would affect the acceleration development and creation of favorable conditions for increasing entrepreneurship of Poles, including entrepreneurship of young people.

“Interesting, how this is to be attained if the reduction of the CIT from 19 to 15 percent. It will be able to use only approx. 8 per cent. micro and small businesses, and those that benefit improve their ability to develop about 57 zł per month? “- wonders economist. In her opinion, for this amount, which will remain in the accounts of small companies may be, at most, cover the cost of higher fees for financial services, whose prices have risen following the introduction of a bank tax.

“I buy a few reams of paper in order to keep the 50 years in the paper documents for employees, unless Parliament changes the law “- assessed.

She added that the Confederation of Leviathan from the beginning pointed to the lack of sense in this idea and proposed the adoption of solutions that create all small businesses real opportunities for development – to increase investment and employment growth, and nowozakładanym companies to survive longer than a year or two.

“First of all postulated conversations with small businesses and shared with them to propose solutions that can be … + support taxpayers for whom difficulties in raising capital for investment and distorted the conditions of competition are the main barrier to the conduct or development of the company. + But officials and politicians know better what companies, especially the smallest is needed – an additional 57 zł per month “- summed up Starczewska-Krzysztoszek.

In contrast, chief economist at the Union of Entrepreneurs and Employers Mariusz Pawlak believes that lowering the tax rate always is positive, because it means smaller burden on the taxpayer.

“anyway, you may ask, what is the purpose of a tax reduction. We have a huge burden on small businesses even contributions to ZUS. To get to CIT need to generate a net profit, which have lower costs, including labor costs. So to lower the rate of CIT for small businesses will not cause a sudden they flourish because they have a number of other restrictions, “- Pawlak told PAP.

stressed that – as intended by the government – changes envisaged amendment to also seal the tax system. “the very structure of income taxes makes room for optimization and avoidance of CIT, will continue to be huge” – believes chief economist ZPP. “If the legislature wanted to achieve a certain effect, based on the fact that and entrepreneurs sigh with relief and budget revenues will be higher, you need to change the design of these taxes, introducing tax revenue or assets” – he added.

stressed that they are simpler and do not require cost accounting of revenues, which are used to manipulate and cause objections tax administration.

the purpose of the amendment is to reduce the corporate tax rate for small taxpayers 19 percent. up to 15 percent. The reduced rate is to cover the company – CIT payers whose income from the sale (including the amount of tax payable on goods and services) did not exceed 1.2 million per year. Fiscal effect of the Act, namely the reduction of budget revenues, is estimated at approx. 270 million zł. The Act contains both changes “sealing” tax collection, which have, according to the Ministry of Finance, align the budget loss.

According to the government in the long term, this story should help to accelerate economic development of Polish and create favorable conditions for increasing enterprise Poles, especially young and well-educated.

the Act contains provisions that prevent the use of the preferential tax rate for entrepreneurs who, for example. will share the company just to take advantage of the reduced rate of CIT. Introduced solution will also affect taxpayers start-ups. Preferential tax rate will not be subject to tax capital groups.

In addition, the changes envisaged further specifying the current rules, so as to eliminate interpretation doubts that may result in avoidance of some income.

proposed rule, which provides for reduction of application set out in the Act preferential taxation of transactions of exchange of shares. In accordance with the principles of the Act shall not apply in cases where the main or one of the main objectives of the exchange of shares is to avoid or evade tax.

More details were also cases in which the income of a taxpayer subject to limited tax liability is deemed to be obtained on Polish territory.

the change is due to come into force on 1 January 2017. Now, this story goes to the Senate.

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