On 16 September 2020, the Polish Council of Ministers published a draft bill amending the corporate income tax (CIT) rules to be in force from 1 January 2021. The bill includes the following tax measures;
Limited partnerships in Poland are treated as CIT taxpayers. Similarly, partnerships in Poland would be subject to the CIT if partners who are not exclusively natural persons in such a partnership are not disclosed to the tax authorities.
A company will meet the definition of “real estate rich” if at least 50% of the market value of the assets of such a company, in any period within the previous 12 consecutive months, constituted real estate located in the area of Poland or the rights to such real estate. Payment of capital gains tax upon the transfer of shares of a real estate rich company will become an obligation of that company (the subject of transfer), not of the shareholders of that entity, if either the transferor or the transferee is not tax resident in Poland. Real estate rich companies will be required to periodically inform the tax authorities about their direct and indirect shareholders and their tax results will be published by the tax authorities. Real estate rich companies will also be required to adopt a tax policy and to publish annual information on the execution of its tax policy. The value of real estate will now be defined as market value, while currently the prevailing approach is book value. An extension of the exemption from the minimum levy on commercial real estate if COVID-19 would continue in Poland after 31 December 2020. An increase in the revenue threshold for “small taxpayers” benefiting from the lower 9% CIT rate from €1.2m to €2m.
The bill also proposed to extend the application of the arm’s-length rule and preparation of transfer pricing documentation, in particular where a beneficial owner (not only the counterparty) has its seat in a tax haven.
It is anticipated that the bill will be signed and published by the end of November and will come into force as of 1 January 2021.
