Planned changes to cit – hidden dividend

Under the proposed changes to corporate income tax, it is planned to repeal the provisions on so-called hidden dividends deferred until January 2023. The controversial provision was introduced by the so-called ‘Polish Deal’ and provided for the exclusion from tax deductible costs, costs incurred by the company in connection with a service provided by an entity related to the company or its shareholder. The construction of the provision could lead to a situation in which obvious and rational expenses would be treated as hidden dividends, as the catalogue of prerequisites was defined too broadly.