Poland: Changes for limited partnerships lead 2021 tax developments

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Poland: Changes for limited partnerships lead 2021 tax developments

Sponsored by

sponsored-firms-mddp.png
Poland has adopted a range of changes concerning the taxation of doing business in the country

Monika Marta Dziedzic of MDDP summarises the key elements that businesses and taxpayers in Poland should anticipate following the announcement of a range of tax regulations in November 2020.

Through the updated regulations in November 2020, Poland has adopted a range of major changes concerning the taxation of doing business in the country.

The changes include the double taxation of some partnerships; deferral of corporate income tax (CIT) for small companies owned by individuals; an obligation to publish tax strategies by large companies; and a new model of taxation for real estate companies.

Limited partnerships

The most revolutionary amendment imposes the status of ‘corporate profits taxpayer’ on limited partnerships (spolka komandytowa) with a seat or place of management in Poland, which so far had been tax transparent.

The model will mean a double taxation, firstly on the level of the partnership’s profit, and secondly at the level of profit distribution to the partners. Limited partners will be entitled to an exemption of 50% of received distributions, but only up to approximately €15,000 ($18,159) per year per limited partnership.

Unlimited partners will be entitled to credit proportionally for the entire income tax paid by the partnership, but only within five years. Thus, the new system will differentiate the tax position of limited and unlimited partners. The above regulations enter into force on January 1 2021 but limited partnerships may decide to only apply them from May 1 2021, and continue the tax transparent treatment until the end of April 2021.

These rules will apply to general partnerships (spolka jawaa) but only if the partners are not individuals, or if the taxpayers participating in their profits are not disclosed. General partnerships with disclosed partners will still be tax transparent.

Deferral of corporate income tax

Lump sum taxation, being a sort of deferral of income tax to the moment of dividend distribution, will apply to companies which select such a system for four years. Companies will have to be owned by individuals, have an annual turnover in the preceding year of up to approximately €25 million, and cannot have participation in other entities and passive income exceeding 50% of turnover.

There are plenty of other requirements and conditions for this system to apply, including consideration of employment, and investments in new assets, among other factors. Thus, one should carefully check if the company qualifies for the tax deferral.

Other major developments

Companies with a turnover exceeding €50 million per year, and tax capital groups, will be obliged to prepare and publish strategy reports on the execution of their tax policy on their websites, within 12 months after the end of the tax year.

Real estate companies will have a series of new duties to comply with. For example, when the shareholder sells their shares, it will be the real estate company that has to pay the capital gains tax. Some real estate companies will be obliged to appoint a formal tax representative, and many will have to report information about their shareholders (where there is more than 5% participation).

Entities operating in special economic zones (SEZs) will not be entitled to change the depreciation rates for new assets.

Losses carried forward will not be possible after further reorganisations.

Transfer pricing documentation will be required when the beneficial owner of the party to the transaction is from a tax haven.

A reduced 9% CIT rate will apply to companies with a turnover of up to €2 million (increased from €1.2 million).




Monika Marta Dziedzic

T: +48 22 322 68 88

E: monika.dziedzic@mddp.pl

more across site & shared bottom lb ros

More from across our site

Effective audit management requires more than documentation; it’s the way taxpayers engage that can shape audit direction, manage procedural ambiguity, and preserve options for appeal or litigation
American advisers are falling short of client expectations when it comes to providing value-added services, but remaining tight-lipped won’t make the problem go away
Awards
The Social Impact Awards unveil new categories to reflect a changing legal and social landscape
Australia's approach to tax policy has undergone significant shifts in recent years, reflecting global trends and unique domestic considerations. These developments merit close attention from tax professionals
The UK has temporarily dodged the 50% rate due to a trade deal signed with the US in May; in other news, Ryan acquired a Northern Irish tax firm
Following a $28 million funding round, Aibidia wants to ‘double down’ on the US market via partnerships with the ‘big four’, the Finnish TP tech provider’s CEO tells ITR
The Luxembourg-based TP leader tells ITR about relishing the intellectual challenge of his practice, his admiration for Stephen Hawking, and what makes tax cool
The case to determine whether the tariff regime is constitutional will eventually find its way to the US Supreme Court, ITR has also heard
In other news, the Council of the EU pledged support to a CBAM simplification and exemption initiative, and Portugal issued new VAT filing guidance
While Brazil’s sweeping tax updates are a triumph for modernisation, Giuliano Gioia of Sovos warns that MNEs with a Brazilian footprint should be prepared for a short and sharp adjustment
Gift this article