Deloitte Poland Tax News for Financial Institutions | August 2021
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Deloitte Poland Tax News
for Financial Institutions
August 2021
Deloitte Poland Tax News
for Financial Institutions | August 2021
New Polish Deal – changes in CIT • allowing subsidiaries to hold shares in The discussed draft amendment addresses
On July 26, 2021, the draft Act amending other subsidiaries included in the tax the settlement of tax losses:
the Act on Personal Income Tax, the Act on capital group (currently only the parent
• By companies forming a TCG, if it loses
Corporate Income Tax and some other acts company may hold shares in other
its taxpayer status, if the loss is incurred
(the so-called “Polish Deal”) was published. entities forming TCG);
before the group is established;
The planned effective date of amendments
• Eliminating the tax profitability condition
presented therein is January 1, 2022. • By TCG, if a company from the group
for tax capital groups (currently 2%
incurs a loss before the group is
profitability is required);
Changes to CIT crucial for financial established.
institutions are presented below. • Eliminating the requirement to conclude
a tax capital group agreement in the form
Tax capital group (TCG) of a notarial deed (an ordinary agreement
The bill provides for a number of concluded in writing will be sufficient);
amendments related to the establishment
• Changing rules for extending TCG after
and operation of TCG. The planned
the registration of the agreement;
changes include:
• Changing rules for reporting the
• Reducing the average share capital
extension of TCG duration.
requirement for each TCG company to
PLN 250,000 (currently: PLN 500,000);
Deloitte Poland Tax News for Financial Institutions | August 2021
Defining the corporate office in Poland • Postponing the deadline to present • Changes in the definitions of related
The bill introduces a definition of the transfer pricing information to the end of party and significant impact (they are
corporate office located in Poland, which is the eleventh month following the end of extended with a statement that they
a condition forcing taxpayers to obtain the a given fiscal year (at present, this is the include cases of direct or indirect holding
status of Polish tax resident and will be of end of the ninth month); of at least 25 percent of shares or rights
importance for companies incorporated or to absorb entity’s losses).
• Eliminating the statement on the
operating abroad.
preparation of a transfer pricing file in
New taxation regime for Polish holding
the form of a separate document; in
In line with the planned amendments, companies
a modified form, the statement shall
taxpayers who do not have their registered The planned amendments include:
be included in the transfer pricing
seat in Poland are assumed to have it if
information; • 95 percent of the amount of dividends
individuals or entities comprising their
received from a holding company from its
supervisory bodies, general meeting or • Postponing the deadline to file a local
subsidiaries being CIT-exempt;
management bodies: transfer pricing file if demanded by tax
authorities from seven to fourteen days; • Gains on sales of shares in subsidiaries
• Have their residence on the territory of
to unrelated parties being CIT-exempt in
Poland, or • Changes regarding transfer pricing
whole.
amendments: instead of a related party
• Manage the matters of the taxpayer
statement, the taxpayer amending
actually, directly or through other The regulations are to provide an
its transfer prices will be permitted
entities, including based on its act of alternative to the current exemption from
to present an accounting voucher
incorporation, court decision or another dividend payment. In our view, the planned
confirming that the related party has
document regulating its incorporation amendments are based on the assumption
amended the transfer prices in question
or operation, or based on the power of that a taxpayer operating as a holding
in the same amount as the taxpayer. The
attorney or actual relationships between company can choose from the following
condition that the amendment should be
the taxpayer and such residents of options:
confirmed by the taxpayer in the annual
Poland.
tax returns for the financial year the • Using the currently available dividend
amendment pertains to will be cancelled; exemption (Article 20.3 and Article 22.4
Based on the justification of the
of the CIT Act), or
amendments, their purpose is to clarify • Changes in the safe harbour related
that Polish tax residents whose whole regulation: the period during which the • Using the exemption offered under the
income is taxable in Poland include not condition of being able to use the safe planned holding regime. In such a case,
only entities that have their registered seat harbour mechanism is examined will taxpayers shall be entitled to have their
in Poland, but also those that do not have include the fiscal year, not the financial income on sales of shares in subsidiaries
one, but are formally or actually managed year. Additionally, the bill addresses the exempt from CIT.
by a Polish resident (residents). date as at which a loan (bond) agreement
must comply with financial safe harbour The above principles shall apply only if an
Filing accounting records in the terms as regards interests: the conditions entity is classified as a holding company.
electronic form must be fulfilled each time a loan
According to the planned amendment, agreement is modified; In line with the bill, a holding company is a
CIT payers shall be obliged to maintain Polish tax resident operating as a limited
• Adding a regulation that determines
accounting (tax) records using computer liability company or a joint stock company
the value of controlled transactions
software and to file them in a specified and fulfilling the following additional
for entities without legal personality
format on terms provided for in the Tax conditions:
(partnerships): in such cases, the value
Ordinance within the deadline applicable to
should be determined as the total of • Directly holding (owning) at least 10
the filing of annual tax returns.
partner contributions; percent of shares in a subsidiary for at
least one consecutive year;
Changes in transfer pricing regulations • Adding a provision that local transfer
The Polish Deal includes a series of changes pricing files of entities without legal • Not participating in a tax capital group;
planned with regard to transfer pricing. The personality, joint ventures or similar
• Not using tax exemptions (such as special
key ones include: arrangements should include adopted
economic zone or decision on support);
principles regarding the rights of
• Postponing the deadline to prepare local
partners or parties to the arrangement • Actually carrying out business operations;
transfer pricing file to the end of the
related to profit or asset sharing and loss
tenth month following the end of a given
absorption;
fiscal year;
Deloitte Poland Tax News for Financial Institutions | August 2021
• Its shares not being held (directly or grow considerably. The new provisions will – are paid by the related party in the
indirectly) by a shareholder whose regard the method of calculating taxable form of a dividend or other profit
registered seat or corporate office is revenue related to merger and split-up sharing revenue in the year of obtaining
located in a territory or country: transactions. In principle, such transactions the amount receivable
– listed in the Regulation of the Minister will be tax-neutral, provided they meet
of Finance regarding countries and additional conditions determined in the And account for at least 50 percent of
territories that apply harmful CIT Polish Deal. An important change in this the revenue generated by the entity,
competition; respect will involve the right to classify determined in line with the regulations
– included in the EU list of non- as non-taxable revenue earned by a on the corporate income tax or by the
cooperative tax jurisdictions accepted shareholder / partner of the acquiree or accounting regulations.
by the Council of the European Union; a split entity and accounting for the issue
– with whom the Republic of Poland has value of shares allocated by the acquirer or Under the amendment, the above taxation
not concluded an international treaty, a new company only when: principles shall not apply if the costs are
in particular a double tax treaty, or with incurred in respect to a related party
• the shares in the acquiree or the split-
whom the EU has not concluded an whose whole income undergoes taxation
up entity have not been acquired or
international treaty that would entitle in an EU member state or in an EEA state in
assumed as a result of the exchange of
it to obtain fiscal information from the which the related party actually carries out
shares, or another acquisition or split-up
state’s tax authorities. material business operations.
transaction; and
Changes in regulation on the exchange • the value of shares allocated by the Depreciation / amortisation in real
of shares acquirer or a new company determined estate entities
The bill provides for a series of changes by a shareholder for tax purposes does In line with the planned amendments,
in the taxation of reorganisation changes, not exceed the value of shares in the real estate entities, i.e. those generating
including the tax treatment of share acquiree or the split-up company that most of their revenue or income from
exchange transactions. would be determined for tax purposes real estate they own, shall be entitled
without the acquisition or split-up. to treat depreciation and amortisation
The planned changes include extending charges on their assets as tax-deductible
the list of conditions that must be met in The bill includes new, more challenging expenses up to the amount of depreciation
order for a taxpayer to be able to apply income taxation and tax exemption / amortisation charges calculated in a
preferential taxation of income related to mechanisms (conditions) to be introduced given financial year in line with the current
the exchange of shares. in relation to an acquirer participating in a regulations on the use of tangible assets,
merger or split. and charged to the entity’s profit/loss in
Two new conditions are added to the CIT the same year.
Act: Taxation of income shifting
The planned amendments include The above change may adversely affect
• The shares contributed by a shareholder
provisions introducing tax on entities taxpayers who, due to the accounting
/ partner have not been acquired or
taxable in Poland (Polish tax residents) in classification of their real estate, do
assumed as a result of a share exchange
relation to income shifting. The tax rate will not recognise depreciation changes for
transaction or allocated in a merger or
amount to 19 percent. The shifted income accounting purposes.
split-up;
shall include specific costs incurred directly
• The value of shares acquired by a or indirectly with regard to a related party Changes in withholding tax regulations
shareholder / partner determined for tax and accounted for as its receivables if: The Polish Deal projects amendments to
purposes does not exceed the value of the regulation regarding the withholding
• CIT actually paid by the entity for the
shares contributed by this shareholder tax. They include restrictions to the WHT
year in which the amount receivable
/ partner that would be determined for refund on passive revenue (income) paid to
was obtained in its country of residence,
tax purposes had no share exchange related parties and a permission to issue
corporate office or location is 25 percent
transaction occurred. an opinion on exemption (reduced tax
lower than the CIT amount charged
rate) based on DTT provisions, currently
based on the 19 percent tax rate. The
Changes in regulations addressing permitted only with regard to Polish WHT
actually paid tax is understood as
corporate merger and split-up regulations.
the amount non-refundable or non-
The Polish Deal provides for material
deductible in any form, including to
changes in the taxation of a merger and Other changes include withholding tax
another entity; and
split-up. As a result the number of cases explanations to be prepared by the
when such transactions are subject • If these costs: Ministry of Finance.
to CIT (in particular to be paid by the – are classified as tax-deductible
shareholding entity or the acquirer) shall expenses or tax relief in any form; or
Deloitte Poland Tax News for Financial Institutions | August 2021
Costs of performances provided
by a related party shall not be tax-
Consolidation relief
Based on the justification of the bill,
Contact us:
deductible projected regulations regarding the
Under the planned amendments, costs consolidation relief are to provide tax
related to the performances whose direct incentives for taxpayers interested in
or indirect beneficiary is a shareholder business expansion in Poland and abroad
or an entity directly or indirectly related in the form of purchasing shares in
to the shareholder or to the taxpayer, if a companies that operate on these markets.
performance or an obligations giving rise
to it has not been granted on the same In line with the Polish Deal, taxpayers who
terms in part or in whole to this entity incur “eligible expenses” on the purchase
Jakub Żak
or shareholder, are not classified as tax- of shares in foreign businesses (limited
Partner
deductible. liability or joint stock companies) will be
Tax Advisory Department
entitled to deduct them from taxable
e-mail: jazak@deloitteCE.com
Currently, such costs shall not be treated as income in the year in which they have been
tel.: +48 513 136 220
tax-deductible also if, had the performance incurred. The maximum deduction amount
not been provided, the taxpayer would cannot exceed PLN 250,000 in a fiscal year.
obtain a net profit for the financial year The “eligible” expenses include:
(as determined in the binding accounting
• Legal support of share purchase
regulations) in which the performance
transactions including valuation (due
was recognised in profit / loss. Since the
diligence);
bill does not include the entire regulation,
changes to the proposed contents thereof • Direct taxes on the transaction;
may be expected.
• Notarial, court and fiscal charges. Agnieszka Ostrowska
R&D relief Partner Associate
The price paid for the shares and costs Tax Advisory Department
The bill introduces changes to regulations
of debt financing related to the purchase e-mail: aostrowska@deloitteCE.com
on R&D relief. If the amendments come
shall not be eligible. Taxpayers will be able tel.: +48 604 949 986
into force:
to use the relief if the following conditions
• A taxpayer paying PIT advances are met:
and lump-sum PIT on salaries of its
• The company whose shares are
employees or contractors will be able
purchased by the taxpayer is a legal
to deduct them from taxable income as
person with its registered seat or
eligible R&D expenses, if not deducted
corporate office in a state with whom
as a result of a former loss or because its
the Republic of Poland has signed a valid
income was lower than the deductions
double tax treaty, which entitles Polish
available;
tax authorities to request tax information
Przemysław Skorupa
• The amount deductible will increase; from tax authorities of this state;
Director
• A taxpayer paying PIT advances • The core business of this company is Tax Advisory Department
and lump-sum PIT on salaries of its the same as the core business of the e-mail: pskorupa@deloitteCE.com
employees or contractors will be able taxpayer that purchases its shares, or tel.: +48 502 788 720
to deduct them from taxable income as can be reasonable considered auxiliary
eligible R&D expenses, if not deducted to the business operations carried out by
as a result of a former loss or because its the taxpayer (and cannot include financial
income was lower than the deductions activities).
available;
• Taxpayers will be able to use the R&D
relief and IP Box relief at the same time
and on the same income.
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