Poland: Poland’s major tax changes for 2017
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

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

Poland: Poland’s major tax changes for 2017

glowacki.jpg

Bartosz Głowacki

After years of discussion, Poland started to tax gains of non-residents on real estate companies, i.e. gains on shares, interest in tax transparent partnerships and collective investment vehicle units if at least 50% of assets of that entity consist of Polish real property.

In line with the law, the real estate assets test has to be made on the last day of the month proceeding the month the disposal took place, which gives the taxpayers some flexibility.

Also, the gains of non-residents on publicly traded shares will be taxable in Poland.

However, the applicable tax treaty may change the above treatment of gains on real estate companies and publicly traded shares.

Separately, the corporate income tax (CIT) exemption applicable to collective investment funds has been slightly narrowed. Now, Polish closed-end investment funds are no longer exempt, but this is only the case with regards to income earned from interest in tax transparent partnerships, income from loans granted to, and securities issued by, such partnerships. Similar limitations apply to CIT exemptions of EU/EEA seated collective investment schemes. The tax exemption applies to all other sources of income including interest, capital gains and dividends, making this form of activity still very competitive.

The new corporate taxpayers, as well as most of the small ones, are subject to 15% CIT instead of the standard rate of 19%. A taxpayer is recognised as small if its previous financial year's revenue (VAT inclusive) did not exceeded €1.2 million ($1.3 million).

Contribution in kind of assets other that an ongoing concern is now taxed as a sale. Before the amendment, the contributor was taxed on the face value of shares received in exchange for the contribution (less the deductible costs). Now, the market value of assets transferred to a company constitutes a taxable revenue and less the underlying costs is taxed with standard 19% CIT rate.

Some defined R&D qualifying costs give the right to additional 30% or 10% deduction from taxable basis.

Formal letters of practice (tax rulings), including those issued in the past, will give no protection if they relate to tax avoidance challengeable on the grounds of the general anti-avoidance rules (GAAR).

There are many new requirements for transfer pricing documentation. VAT law was also significantly amended.

Bartosz Głowacki (bartosz.glowacki@mddp.pl)

MDDP

Tel: +48 22 322 68 88

Website: www.mddp.pl

more across site & bottom lb ros

More from across our site

Despite the relief, Brazil’s government has also presented a bill which seeks to re-impose a tax burden on companies’ payroll, one local tax specialist told ITR
Jeremy Brown arrives at the firm after a near 16-year career with Deloitte
PwC could elect a woman into the senior leadership position for the first time; in other news, KPMG Australia has extended its CEO’s term
The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
Gift this article