Flat rate taxation on corporate income is a tax option, i.e. it is voluntary. This can be done by the end of the first month of the tax year in which the company wishes to benefit from the Zero tax on reinvested profits solution, or during the tax year.
In order to make use of this option, a taxpayer meeting the statutory conditions, in both of the above cases, should submit a notice of the choice of flat rate taxation on form ZAW-RD to the competent head of the tax office.
A notice of selection of the Zero tax on reinvested profits solution may also be filed before the end of the tax year adopted by the taxpayer. Then, on the last day of the month preceding the first month of flat rate taxation, the taxpayer shall close its books and prepare financial statements in accordance with the accounting regulations.
The closure of the books implies the obligation to account for classical CIT and to file a CIT-8 return. This will allow the correct determination of the tax base for the period of application of the Zero tax on reinvested profits solution. In this case, the books of account are opened on the first day of the flat rate taxation month (art. 28j(5) of the CIT Act).
Flat rate taxation covers a period of immediately consecutive 4 tax years and may be automatically extended for successive periods of immediately consecutive 4 tax years, unless the taxpayer submits information on opting out of the flat rate taxation in the CIT-8E return (art. 28r(1) of the CIT Act), filed for the last tax year in which the taxpayer is to be flat rate taxed.
Compare: amended legislation from 1 January 2023.
The point at which the ZAW-RD form must be filed in the case of a taxpayer converting to the Zero tax on reinvested profits solution during the tax year has been clarified. The enacted amendments indicate that the general rule (expressed in art. 28j(1)(7) of the CIT Act), according to which a taxpayer should file a ZAW-RD form by the end of the first month of the Zero tax on reinvested profits solution year, applies in such a situation.