• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/17/2013

Poland - Proposed taxation of controlled foreign companies (CFCs) 

May 17: A proposal to amend Poland’s corporate income tax and individual income tax laws would introduce provisions to address certain transactions involving controlled foreign companies (CFCs) maintained by Polish taxpayers in jurisdictions that have a lower rate of taxation.

In general, the draft legislation would require a Polish taxpayer to include in income the earnings and income of controlled foreign entities when the entities are residents of a country that imposes a lower rate of taxation.

The proposal defines the term “CFC,” identifies the tax base for Polish income tax purposes, and lists the filing and reporting requirements of Polish taxpayers with CFCs.

Exceptions to these rules would be provided for companies “engaged in genuine economic activities” in other EU Member States and subject to tax in those countries as well as entities whose gross income does not exceed €250,000 or 10% of gross income arising from actual business activities of countries outside the EU.

If enacted, the provisions would be effective 1 January 2014.

Read a May 2013 report [PDF 154 KB] prepared by the KPMG member firm in Poland: Taxation of Controlled Foreign Companies (CFC) in the Corporate and Personal Income Tax Acts

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