Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/14/2012

Poland - Proposal to tax “limited joint-stock partnerships” as corporations 

August 14: The Ministry of Finance is considering a proposal to tax “limited joint-stock partnerships” (spolka komandytowo –akcyjna, SKA) in the same manner as a capital company.

Background

An SKA is treated as a partnership in Poland. Income of the SKA is not subject to tax at the entity level, but is subject to tax at the partner level.


In situations when an SKA interest-holder is involved in the partnership in a “passive manner,” only the income resulting from the ownership of interests in the SKA is subject to income tax. Thus, the interest-holder is subject to tax only on receipt of a distribution from earnings and profits.


This treatment was upheld by Poland’s Supreme Administrative Court earlier this year, when it concluded that income received by a person holding an interest in an SKA is taxable at the moment of actual payment. See TaxNewsFlash-Europe: Poland - Income from limited joint-stock partnership is taxable at moment when actually received

Proposed changes

The Ministry of Finance has proposed that an SKA is to be taxed in the same manner as a corporation. This change, if enacted, could affect Polish investment funds in which the fund acts as an interest-holder of the SKA.


The planned amendments also would concern Poland’s:


  • Thin capitalization rules
  • Determination of revenue and costs of benefits in-kind
  • Rules for establishing the initial value of assets of a foreign branch
  • Rules for the transfer of headquarters of European entities to Poland
  • Rules allowing a dividend to be exempt from tax if the dividends are deductible in the country where the entity paying the dividend is a resident (these rules would be repealed under the proposal)

Read an August 2012 report [PDF 192 KB] prepared by the KPMG member firm in Poland: Work on amendments to the laws on corporate income tax and personal income tax including those that apply to limited joint-stock partnerships (“SKA”)




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