How it was
Until 31 December 2017, the company's income from non-agricultural activity was exempt from tax (Article 17 section 1 item 4e in conjunction with section 1d of the Act on corporate income tax).
Said exemption would apply under two conditions:
How it is
- income was intended for agricultural activity,
- in the tax year preceding the relevant tax year, the share of revenues from agricultural activity, increased by the amount of consumed raw materials and materials derived from company's own vegetable and animal production, constituted at least 60 per cent of the revenues earned by the company.
The above-mentioned Article 17 section 1 item 4e and section 1d has been repealed.
In the opinion of the lawmaker, "the repealed provisions contained an element potentially resulting in a lack of taxation of the non-agricultural business activity, which remains irreconcilable with the tax preference effect desired by the lawmaker".
What that means:
As regards entrepreneurs from the agricultural sector, the above change will result in the need to tax income arising from any activity other than agricultural activity, regardless of whether it will be allocated to such activity.