On 29 October 2020, the lower chamber of the Polish Parliament (Sejm) passed a law to amend various statutes in relation to income taxes.

The amending law has now been transmitted to the Senate.

Below we summarise major changes:

  • Limited partnerships and certain registered partnerships (spółka jawna) will have the status of taxpayers for corporate income tax purposes, except that a limited partnership may defer this status change until 1 May 2021.
  • The ability to deduct losses will be limited where the taxpayer has taken over or acquired an entity or going-concern business, including in payment for the taxpayer’s shares, or has acquired a going-concern business in exchange for a cash contribution.
  • There will be a wider definition of a real estate entity for the purposes of Polish income tax on proceeds of sale of shares in such entities. Real estate entities will have to appoint fiscal representatives in Poland. Any withholding tax obligations in connection with sale of shares in an real estate entity will be on the entity, rather than on the seller as before.
  • Restrictions on the ability of taxpayers to change depreciation rates if they enjoy tax exemptions.
  • Distributions of non-cash assets of liquidated companies to their shareholders during the winding-up process will be taxed.
  • Taxpayers (CIT) will be required to prepare and publish annual tax policies.
  • There will be more transfer pricing restrictions in the case of transactions with tax havens.

The next session of the Senate is scheduled for 25 November 2020. We will keep you up-to-date on the progress of this legislation.

If these issues pertain to your business and you are interested in our assistance, please contact your WTS&SAJA consultant.

Doradztwo Podatkowe WTS&SAJA Sp. z o.o.

Bałtyk Building, 13th floor

ul. Roosevelta 22

60-829 Poznań

tel. (+48) 61 643 45 50

Warsaw Office

Central Tower, 22nd floor

Al. Jerozolimskie 81

02-001 Warszawa

This Newsletter is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.