On 28 June 2021, the Poland’s Ministry of Finance has opened a public consultation for a new tax bill called the “Polish Deal.” With other amendments, the bill provides the clarification of definition of place of management for corporate taxation.
According to the current Polish tax law, the definition of tax residence for corporations is relatively narrow and imprecise. The corporation is considered to be taxable in Poland (i.e. taxable in Poland) if it has headquarters office or management in Poland.
In the new tax law, the ministry proposes to clarify the concept of place of management. The amended rule covers two special circumstances for non-residents. According to the amended regulation, non-resident companies (not based in Poland) can continue to have a place of business management in Poland if individuals or other persons exercise functions in control, supervisory or management bodies of this company and meet one of two conditions. One, such persons have their place of residence, headquarters or management in Poland. Alternatively, such persons actually carry out, directly or indirectly conduit companies, day-to-day business of the company – on the basis of a constitutional contract, court decision or other constitutional document, power of attorney or an actual connection between persons who are tax residents in Poland or corporations that are tax residents in Poland.
The bill has a plan to enter into force on 1 January 2022.
