The legal activity to be traded on the subject with the aid itself may be declared invalid, as follows from the NSA judgment 8 June 2018 reference no. II FSK 1689/16.
In the present case, the applicant requested an individual interpretation of the provisions of tax law, indicating that he had subscribed to part of the shares in a limited liability company and then paid the aid to that company. He then acquired additional shares from other shareholders of the company.
In the end, he sold all held shares, with the sale of shares and the sale of receivables for payments being settled separately.
The taxpayer asked whether the tax settlement of the sales of receivables in respect of payments between shareholders would be subject to an exemption in income tax on natural persons, which would apply to reimbursement of payments to shareholders by the company.
The aid to and the right to reimbursement of the company is closely linked to the participation and always belongs to the shareholder. Thus, the amount of the aid may only be included in the price of the shares sold and may be increased.
The Authority indicated that the aid and the right to reimbursement are closely linked to the participation and are always entitled to participate. Thus, the amount of the aid may only be included in the price of the shares sold and may be increased. In this case, therefore, the solution specific to the trading of receivables does not apply.
The taxpayer challenged the interpretation to the court, but both the WSA and the NSA confirmed the Authority’s position, assuming that it is not possible to obtain a separate income from the cash capital due to the divestment of the company’s shares (on the basis of Article 17(1)(6) point (a) u.p.d.o.f.) and a separate income from property rights due to the divestment of the sale of the payment claim (based on Article 18 u.p.d.o.f.)
The NSA has clearly indicated that the aid and the right to reimbursement are closely linked to the participation and always have the right to participate, and that the right to reimbursement cannot be divested separately from the participation.
This leads to the conclusion that the divestment of shares in a limited liability company makes it pointless to dispose of overpayment claims because the claim has already been transferred to the buyer of the share.
Splitting this legal act into two contracts: the sale of shares and the sale of the right to reimbursement of subsidies – as the Provincial Administrative Court correctly notes again – was therefore artificial and had no legal basis.
It is therefore excluded in such a situation to obtain a separate income from the cash capital due to the divestment of the shares in the company and a separate income from the property rights due to the sale of the claim for reimbursement of payments.
Although both the payment of the aid and the reimbursement of the aid remain indifferent under the Income Tax Act on individuals, there is no normative basis for establishing that the tax-indifferent is the turnover of the subsidies understood as distinct from the turnover of shares in the return claims.
The point is that the turnover of subsidies themselves, including claims for reimbursement, is impossible without the turnover of shares, and that inert turnover is no longer tax-free.
Author:
Aleksandra Księżyk – Legal advisor, Director of the Legal Department in Warsaw Chancellery Russell Bedford Dmowski and Partners Law Firm sp. k.