Ewelina Buczkowska, Maja Dajczak
Rzeczpospolita

The article presents the problem of treating joint venture revenues. Even though joint ventures are gaining popularity, they have not been defined for tax law purposes. The essence of a joint venture is that at least two entities, which do not have sufficient competence or resources on their own, start collaborating towards one commercial objective. Under CIT and PIT acts, joint ventures do not enjoy the status of the taxpayer – their participants do. Sole proprietorships should recognise joint venture income under “non-agricultural business”. However, doubts arise as to what natural persons not in business should do. None of the income sources specified in the PIT Act directly covers joint venture income. This means that perhaps it should be recognised under the so-called “other gains”. This is the view taken by administrative courts. However, tax authorities are of a different opinion. According to them, income gained by participants who make cash contributions should be recognised as capital gains. Regarding the CIT Act, controversies on how to recognise joint venture income arose in 2018 when the division between the two income sources was established. According to tax authorities, income should be recognised under the right source at joint venture level, not at the participant level. Given the multitude of possible situations and the difference in positions held by tax authorities and administrative courts, each and every case requires an individual analysis.