CIT amendments could hurt the economy - KNF

According to the Financial Supervision Authority KNF, the changes proposed by the finance ministry to the CIT could be harmful to the country’s economy. Especially affecting in a negative way insurers, brokerages and investment vehicles. “Separating capital gains and other profits and taxing them separately would affect activities of investment companies. They operate on the capital market by carrying out the investments for their own profits, as well as being the market’s leaders, ensuring a smooth turnover on the organized markets such as the Warsaw Stock Exchange,” KNF said in a statement. According to the regulator, the brokerages would be also affected by the new laws, as it “disrupts the holistic view to the operations of an entity by separating capital gains from other income.” It also does not take into account the “peculiarity of the insurance business,” according to KNF. The Finance Ministry is working on draft amendments to the tax law which would force multinational corporations to pay income taxes in the country where the profit is generated. In addition, the finance ministry wants to modify the tax avoidance rules by creating controlled companies in tax havens, as well as the regulations governing the operation of tax groups, and linking the artificial financial losses with actual operating profits.