I.
Newly
established entities which fulfills the conditions detailed below may apply 0%
CIT rate for the first year of the activity. The conditions are:
a. average number of employees does not
exceed 10;
b. annual income does not exceed EUR
300 000;
c. the shareholders of the entity are
natural persons;
d. in the three tax periods (including
the first one) the activity of the entity is not stopped, the entity is not
liquidated or reorganized and the shares of the entity is not transferred to
new shareholders.
II.
5%
CIT rate is applied to the profits earned from the use, sale or other transfer (including
royalties and compensations for violated intellectual property rights) of
assets created while executing scientific research
and experimental development activity.
III.
The
restrictions to deduct representation expenses are changed – from 1 January 2018
the tax payers will be allowed to deduct only 50% of representation expenses
(till 01.01.2018 – 75%) and the total value of deductible representation
expenses cannot exceed 2% of the entity’s income. We would like to note that
related to the changes mentioned above, the entities will be able to deduct
only 50% of the input VAT from representation expenses, instead of currently
deducted 75% of input VAT.
IV.
From
1 January 2018 only gambling expenses will not be considered as representation
expenses (even if they fulfil other requirements to representation expenses), while
before 1 January 2018 more types of expenses were not considered as
representation expenses (hunting, fishing, yachting, golf, gambling, camping).
V.
Taxable
profits may be reduced by the investment project expenses up to 100% (till
01.01.2018 – the taxable profits may have been reduced up to 50%). Taxable
profits may be reduced by the expenses incurred during 2009-2023 tax periods.
The requirement to inform the tax authority about the investment project was
abolished.
VI.
The
list of activities which entities may execute in free economic zones and be
entitled to use CIT incentives is abolished. However, we would like to note
that trade companies may not use CIT incentives.
If you would like to know more about the tax
changes, please contact us.
29.12.17
Latest articles
28
Oct
15
Jun
2
Jun
We will send you articles keeping you up to date with the latest trends and developments in accounting, taxation or legal fields.