Poland: Corporate income tax subject to limited joint-stock partnerships

The new Polish Corporate Income Tax Act has introduced important changes for limited joint-stock partnerships (i.e. partnerships limited by shares).

Taxation of the partnership.

Beginning with 1 January 2014, limited joint-stock partnerships have become subject to Polish corporate income tax (CIT) of 19%, with some exceptions available to entities with shifted or prolonged fiscal years, to which the old regulations will still apply in the relevant periods. A limited joint-stock partnership (S.K.A.) is characterized by having at least one general partner with unlimited liability and at least one shareholder. The former rule of taxation only on the general partners’ and shareholders’ level has been abandoned. With the changes, limited joint-stock partnerships have become subject to CIT under the same rules as joint-stock companies and limited liability companies.

Taxation of partners and shareholders.

The general partners will become subject to taxation only with regard to their share in the partnership. Furthermore dividends actually received by the shareholders are subject to 19% capital yields tax, with relevant tax exemption applicable for qualified legal entities (generally same as for corporations based on parent-subsidiary directive regime). It is worth to mention that general partner will be allowed to credit the tax paid by the limited joint-stock partnership against his own tax due on its profits attributable to him.

Differences to the taxation of companies.

There will be some differences between the taxation of limited joint-stock partnerships and limited liability companies or joint-stock companies. For example, the exemption from withholding tax (WHT) on revenues received from royalties and interest paid to EU entities will not be applied to limited joint-stock partnerships and also the WHT exemption on dividends will not apply to profits earned by the limited joint-stock partnerships before becoming CIT payer.

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Barbara Behrendt-Krügelstein

Barbara Behrendt-Krügelstein

Manager | Deloitte Tax
Telefon: +43 1 537 00 7112
Mail: bbehrendt-krueglstein@deloitte.at

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