Latest version of major package of amendments to PIT and CIT regime

On 10 August 2026, the RCL website published another version of the draft major amendment to the PIT and CIT Acts and certain other acts (No. UD116). The draft is currently being considered by the Standing Committee of the Council of Ministers, with entry into force planned for 1 January 2027. The new version provides, among other things, for the exclusion of the possibility of changing depreciation rates after the deadline for filing the annual tax return, clarification of the tax consequences of performance in lieu of fulfilment (datio in solutum), and changes concerning tax-deductible costs on the disposal of shares in a company formed as a result of a transformation. The draft also reinstates the rule excluding the amortisation of goodwill arising in connection with accepting an enterprise or its organised part for use against payment. The changes also affect Estonian CIT. The definition of hidden profits has been clarified by indicating that the source of financing of the benefits, including profits generated before the company entered the Estonian CIT regime, will not be relevant for their classification. In practice, this may mean that benefits financed from profits accumulated before the election of the lump-sum taxation regime for companies will also be subject to taxation.

On 7 August 2026, the list of legislative and programme work of the Council of Ministers published the assumptions for a draft regulation on the amount of the minimum wage and the minimum hourly rate in 2027. From 1 January 2027, the minimum wage is expected to be PLN 4,950 and the minimum hourly rate PLN 32.30. The draft is scheduled for adoption by the Council of Ministers in Q3 2026.

Last week, the list of legislative and programme work of the Council of Ministers included the assumptions for a draft act amending the Tax Ordinance Act. The draft provides for transferring to the Director of the National Tax Information Service the power to issue individual tax rulings concerning taxes and charges falling within the remit of municipal tax authorities. The draft is scheduled for adoption by the Council of Ministers in Q4 2026.

In its judgment of 7 August 2026 (case ref. I FSK 1980/23), the Supreme Administrative Court held that the mere participation of employees’ family members in team-building events or competitions organised by an employer does not deprive a company of the right to deduct VAT on expenditure incurred in organising such events and prizes. The Court indicated that where the main purpose of the initiative is to build staff loyalty, improve morale and shape a positive image of the employer, the expenditure may have an indirect link with the company’s taxable business activity. In such cases, the personal benefit to participants is secondary.

In its judgment of 7 August 2026 in case ref. I FSK 163/24, the Supreme Administrative Court held that, when organising events such as a jubilee gala, Chemist’s Day or a company Christmas Eve event, the link between the expenditure and taxable activities is beyond doubt in the part relating to the participation of the company’s employees, employees of related companies and members of their families. To that extent, the company is entitled to deduct VAT. With regard to other participants, such as representatives of local government or local associations, the Supreme Administrative Court indicated that the existence of such a link cannot be ruled out but requires an additional analysis of the factual circumstances.

In its judgment of 6 August 2026 (case ref. II FSK 1175/23), the Supreme Administrative Court held that funds received by a railway infrastructure manager from the Railway Fund do not constitute a subsidy from the state budget within the meaning of Article 17(1)(47) of the CIT Act and are not eligible for the tax exemption. The Court emphasised that the fact that some Railway Fund monies originate from the state budget, and that they are transferred under rules similar to those applicable to subsidies, does not change the legal nature of the fund, which is neither the state budget nor the budget of a local authority.