A company that gives away an unnecessary machine for free will have income on which it will pay income tax. An entrepreneur whose closest family gives a computer as a gift will not depreciate it.
Such changes are provided for in the draft amendment to the Acts on CIT, PIT and flat-rate tax on certain income earned by natural persons, which is currently being consulted.
Such changes are provided for in the draft amendment to the Acts on CIT, PIT and flat-rate tax on certain income earned by natural persons, which is currently being consulted.
The Ministry of Finance prepared it with the aim of combating optimization and tightening the income tax collection system (it counts on an additional PLN 27,5 billion in the next decade). However, experts point out that the effects will be felt by many honest companies. Including those that transfer an item or property right for free or provide a free service.
"In economic transactions, cases of free transfer of things (rights) from an economic point of view should not generally take place" - the Ministry of Finance explains the change.
That is why he wants to delete one word from the current Article 14 of the CIT Act: "for consideration". As a result, not only the donee will gain income, but also the donor.
Paweł Turek, partner and tax advisor at BTTP, explains the effects of this change using an example. Company A donates, for example, premises with a market value of PLN 1 million to company B. Under the current regulations, the donated company will pay CIT in the amount of PLN 190. The amendment means that the total tax burden for such a transaction will reach PLN 380 – indicates Paweł Turek. (…)
- The change that the Ministry of Finance is preparing may have a very negative impact on ordinary entrepreneurs - emphasizes Paweł Turek. He fears that the tax authorities, referring to the amended Article 14 of the CIT Act, will return to the bizarre concepts of taxing the free redemption of shares or the transfer of assets after the liquidation of a capital company. - Where is the increase in assets in such a situation? - asks the BTTP expert.
Family optimization
An unpleasant surprise also awaits entrepreneurs who receive property as a gift, but thanks to the exemption will not pay inheritance and gift tax (this mainly applies to the closest family). Currently, they can enter the property received into the fixed assets register and depreciate it, and include the depreciation write-offs in the costs of obtaining income, in accordance with art. 23 sec. 1 item 45a of the Personal Income Tax Act (this is confirmed, among others, by the interpretation of the director of the Fiscal Chamber in Poznań of 24 February 2016, no. ILPB1/4511-1-1552/15-3/AA).
Experts agree with the Ministry of Finance that this is sometimes abused. – The benefit achieved in this way concerns, for example, fully depreciated fixed assets or never depreciated property rights – admits Paweł Turek.
In such a case, the tax authorities cannot use the anti-tax avoidance clause, because the scale of benefits obtained in this way usually does not exceed PLN 100. – Perhaps a change in the regulations was necessary – wonders Paweł Turek.
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