CIT, i.e. the income tax imposed on companies and capital groups, is one of the most circumvented taxes in Poland. Its design allows for numerous maneuvers that minimize the need to give the state a certain percentage of revenues. One of the ways to bypass CIT is to include various non-investment expenses as tax-deductible costs. These include, for example, royalties, interest, or services to transfer profits abroad. Such practices lead to the fact that the Polish state has been losing billions of zlotys for years, which do not go to the state treasury from CIT.

"Whether a given entity pays this tax in Poland is a measure of its tax ethics or economic patriotism. In practice, therefore, there are markets where entities with very comparable, huge turnover show very different results, which are the basis for taxation," Krzysztof Rutkowski, attorney-at-law, tax advisor, and partner at the Law Firm of Customs and Tax Advisory Rutkowski & Partners, said.

“The two sectors which show the problem of CIT avoidance very clearly are the commercial and tobacco sectors. Some entities operating in the commercial industry pay CIT in the amount of several hundred million zlotys per year. Others do not pay it at all. The same is happening in the tobacco sector. One entity has been paying high taxes for many years, and the rest of the industry practically does not pay CIT,” Rutkowski stressed.

(eNewsroom.pl)