Special notice for legal entities making advance tax payments!
Please note the following if you make monthly or quarterly advance tax payments. As you surely know, the amended income tax act, inter alia, reduced the corporate tax rate by one percentage point, from 22% to 21%. In connection with advance tax payments in the period after 1 January 2017 until the submission of tax returns for the 2016 tax year, i.e. from 31 March 2017 (if the taxpayer does not request an extension to file their tax return), the calculation of advance tax payments must be modified given that the act defines the use of the tax rate valid in the tax period for which the advance tax payments are made within the calculation of the amount of such advance payments (the tax rate valid in the 2017 tax year is 21%). Advance tax payments are based on the last known tax obligation, i.e. from the 2015 tax year. This means that tax for the purposes of defining the amount of advance tax payment from row 1110 of the tax return for the 2015 tax year must be recalculated using the current tax rate (21%) valid for the 2017 tax year. This sum can then be distributed depending on if you are a monthly or quarterly payer of advance tax payments, and specifically 4 or 12 equal amounts. This gives you the advance tax payment amount using the current income tax rate to be paid before filing the tax return for the 2016 tax year by the end of the given month (for monthly payers) or quarter (quarterly payers).
Per the instructions for completing the corporate income tax return, the 21 per cent tax rate is used for calculating advance tax payments for the tax period beginning on 1 January 2017.
Calculation: row 1110 = ((row 500 * 21) / 100 – row 610 – row 710 – row 1030)
