Important Amendments to CIT and PIT law in Poland

Sept. 17, 2020 Poland

Please find below the most important changes which may affect your business in Poland:

  • extending limited tax liability towards income from the sale of shares in real estate companies -> obligation of analysis of the structure of RE companies within 12 months prior to a transaction;
  • partnerships (spółka komandytowa and spółka jawna in some cases) are about to become CIT taxpayers -> this means the end of effective structures based on tax transparent partnerships and allowing for tax consolidation of tax results of the entities at the level of their owner;
  • increasing or lowering tax depreciation rates will not be possible with respect to fixed assets used for the purpose of activity exempt from taxation;
  • the new definition of used fixed assets -> they need to be used beforehand by another taxpayer than the one who considers adjusting tax depreciation rates;
  • TP documentation threshold set at the level of PLN 100k for transactions with the entity having its seat or management in a tax haven or transactions in which their beneficial owner is located in a tax haven;
  • a significant limitation of the amount of so-called tax abolition relief -> this means in practice obligation of paying additional tax in Poland by cross-border assignees;
  • transfer from an individual to a company of obligation of the settlement of capital gain from the sale of shares in real estate companies provided that at least one of the parties of the transaction is a Polish tax resident; obligation of establishing fiscal representative for RE company not having its seat or management in Poland under a fine up to PLN 1M; obligation of submitting information on shareholders of such a company;
  • exemption from minimal tax till the end of 2020 (and potentially longer, up to the moment when the COVID pandemic is over);
  • including liquidation proceeds in revenues subject to taxation through in-kind settlement;
  • adjusting the revenues threshold (to EUR 2M) for application of lowered 9% CIT rate;
  • the obligation of preparation and publishing statement from the execution of tax strategy for the given year, solely for so-called big taxpayers.

The changes are about to enter into force as of 2021.

Should you wish to discuss the above in details, please kindly contact:

Łukasz Bączyk
Head of Tax, Board Member

Marta Skrodzka
Tax Manager - Tax Adviser

Paweł Jóźwik
Tax Manager - Attorney-at-law