We recently presented you with a draft amendment to the taxation of family foundations ( Draft amendment to the taxation of family foundations ).
However, if anyone thought that the tax changes for family foundations would be the last to come as an unpleasant surprise in the new year, they were mistaken. On Tuesday, the Ministry published a comprehensive draft of changes to the personal and corporate income tax. Here are the project's key assumptions:
Taxation of the sale of post-lease items received as a gift
Previously, the sale of any movable property that did not form part of a business was exempt from income tax if the sale occurred within six months of acquisition. This was a beneficial solution for entrepreneurs using car leasing. In the case of the sale of property transferred to private assets within six years, the income had to be taxed according to the same rules as business income. However, in the case of a gift to a loved one, the grace period was shortened from six years to six months.
The planned change is that the sale of such an item by a close relative will be exempt from tax after 3 years, not 6 months. A close relative is defined as a person who benefits from the inheritance and gift exemption (the so-called zero group).
Higher tax on the repurchase of shares/warrants allocated under the incentive program
The issuer's repurchase of shares and warrants allocated under the incentive program was subject to a 19% employee tax. The planned change will result in the repurchase being taxed in the same way as remuneration, i.e., under general rules (32% on the excess over PLN 120,000).
Housing relief for one apartment only
The bill introduces additional requirements for accessing housing tax relief. Only individuals who do not own another home will be eligible, and if they do, they will transfer it to descendants, the municipality, or the State Treasury. In the case of joint ownership, ownership of less than a 50% share in the joint ownership will qualify for the relief. However, properties acquired through inheritance will not be taken into account.
IP BOX only for employers
The preferential 5% tax rate for taxpayers using the IP-BOX tax relief will not be available to the self-employed. The bill assumes that this relief will apply to those employing at least three people full-time under an employment contract or a civil law contract (if ZUS contributions are paid on the contract).
Solidarity levy also from IP BOX and with settlement of loss
The solidarity levy will also apply to income taxed at a 5% rate. However, taxpayers will be able to offset losses incurred in previous years, but only from the same source of income.
17% flat rate on transactions with related entities
Businesses subject to flat-rate taxation on recorded revenues will be subject to a 17% tax rate on revenues derived from transactions with related entities. Related entities are defined in the same way as for transfer pricing purposes, with a minimum share of 5% in capital, profits, or voting rights.
Small taxpayers do not always have to pay up to 2 million euros
If the tax year is shorter or longer than 12 months, the project assumes that the limit will be determined as the product of the amount corresponding to 1/12 of the current limit and the number of commenced months of such tax year.
Taxation of partnership liquidation
Currently, the liquidation of a company that is not a CIT taxpayer does not constitute an event triggering the obligation to pay tax. Legislators assume that tax has already been paid by the partners. However, the published draft amendments assume that the liquidation of such a company will be taxable if it was created as a result of transformation from a company that is a CIT taxpayer, and the liquidation occurs within three years of the transformation. Liquidation assets received by partners will constitute income from capital gains, meaning they are subject to a 19% tax.
The end of depreciation in real estate companies
The draft amending act also definitively prohibits tax depreciation of real estate that is not depreciated on the balance sheet by real estate companies.
Changes to the minimum CIT
The simplified minimum tax base is planned to be tied to taxpayer revenue. For taxpayers earning revenues above €50 million, the base will be 5% of revenue. For others, it will remain unchanged at 3%.
The group of entities exempt from the minimum tax will also be reduced. Currently, entities whose profitability was at least 2% in one of the three preceding years are excluded. However, there are plans to shorten this period to two years.
Distribution of profit from Estonian CIT
The current regulations stipulate that, in the case of profit distribution, profits generated during the Estonian CIT taxation period are assumed to be distributed last. According to the planned change, in the case of profit distribution after the Estonian CIT exemption is waived, profits generated during the Estonian CIT taxation period will be distributed first.
A broader catalog of hidden profits
All lease and rental agreements concluded by the company with a partner, as well as the payment of remuneration to the partner for the provision of the following services will be considered hidden profits: advisory, accounting, market research, legal services, advertising services, intermediation services, management and control, data processing, employee recruitment and personnel acquisition services, guarantees and sureties, and similar services.
In addition, the payment of remuneration for non-cash recurring benefits of a partner will constitute a hidden profit.
According to the Ministry of Finance, the bill aims to tighten the tax system. However, it completely ignores the need to simplify tax regulations. Further provisions will be added to the bill, sometimes constituting exceptions to exceptions. The Ministry also seems to have forgotten that a six-month vacatio legis was supposed to apply to the tax changes. The proposed regulations are scheduled to take effect on January 1, 2026.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of September 15, 2025.
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