As we have already pointed out in our publication, the ruling companies are preparing significant changes related to the further sealing of the tax system, among other things, by including income tax on registered companies, although with some exceptions. Draft Act amending the Personal Income Tax Act, the Corporate Income Tax Act, the Flat-rate Income Tax Act on certain revenues generated by individuals and certain other acts (segment printing number 642) it also contains a significant change in the introduction of taxation on the part of the liquidated company of the issue of liquidated assets in kind.
So far, the dispute has been about whether or not the provision of a provision Article 14a Act dated 15 February 1992 on corporate income tax (hereinafter: "the Corporate Income Tax Act”) also include the issue of the liquidation assets to shareholders or not.
There were many differences in the case law.[1] and it can be concluded that a more convincing line was favourable to taxpayers, according to which Article 14a(1) the Corporate Income Tax Act it appeared to be applicable in the case of non-monetary benefits carried out in order to settle in whole or in part liabilities of a specified amount.
The provision states that the income of the debtor is “the amount of the obligation to be settled following a non-monetary benefit”. It was pointed out that there was a different situation about the division of the estate of polyquidajengo, namely, “the property is shared among the partners”.
It was pointed out that the company's commitment was a non-monetary commitment from the beginning, it has no "height". In turn under Article 14a(1) the Corporate Income Tax Act the word ‘regulates the commitment’ is used and the word ‘regulates’ is used for monetary amounts.
The position that such a division of assets between shareholders (and the surrender of assets to their shareholders) applies Article 14a(1) the Corporate Income Tax Act, is unacceptable, in particular, because it would not be possible to indicate "the amount of the obligation to be paid following such a benefit", as it provides for Article 14a(1) the Corporate Income Tax Act It was therefore concluded that the intention of the legislator was not to include Article 14a the Corporate Income Tax Act the type of situation presented in the proposal - because there was no obligation here to be "height" and to be "regulatory".
Unfortunately for taxpayers, the intention of the legislator is likely to change, as the government project shows, i.e. content Article 2(10) Draft Act amending the Act on Personal Income Tax, the Act on Corporate Income Tax, the Act on Flat-rate Income Tax on Certain Revenues of Individuals and Certain Other Acts (Symical Printing Number 642) – Article 14a Under section 1 sentence first the Corporate Income Tax Act is replaced by the following:
Where the taxable person, by the performance of a non-monetary benefit, fully or partially regulates the obligation, including in respect of a borrowing (credit), dividend, redemption or disposal for the purpose of redemption of shares (shares), distribution between shareholders (shareholders) of the assets of the liquidated company or cooperative, the income of such taxpayer shall be the amount of the liability which is regulated following such a benefit.
This means that there will no longer be any doubt as to the taxing of the corporate income tax on the issue of liquidation assets. Importantly, the liquidated company should make a declaration and pay the tax due.
In practice, this means that the company's liquidators should at least carry out these activities a day before the completion of the liquidation.
For example, in the case of a company with an o.o., according to the provision Article 288(1) The Code of Commercial Companies, after the meeting of shareholders has approved the financial statements on the day before the division between the shareholders of the assets remaining after the satisfaction or securing of the creditors (the liquidation report) and after the completion of the liquidation, the liquidators should declare this report at the registered office of the company and submit it to the register court, at the same time as filing a request for the removal of the company from the register.
Deletion of the company from the National Court Register, which is also an entry (Article 20(4) Act dated 20 August 1997 o National Court Register) becomes effective and enforceable only after finalisation, resulting from the provision Article 6945(2). Code of Civil Procedure — ‘The provisions on alerts shall be effective and enforceable at the time of their issue, with the exception of those concerning the deletion of an entity from the National Court Register.’
This means that if the liquidation procedure of the company is currently in progress, steps must be taken to terminate it as soon as possible, so that before the end of this year the company is removed from the KRS, i.e. the expiry of the deletion alert, rather than the mere adoption of the court order.
[1] The position favourable to taxpayers is presented in the rulings:
WSA in Łódź by day 19 April 2016, reference no. I SA/Łed 146/16; WSA in Krakow of: 19 October 2016, reference no. I SA/Kr 943/16 and I SA/Kr 976/16, 9 November 2016, reference no. I SA/Kr 993/16; WSA in Gdańsk by day 23 November 2016, reference no. I SA/Gd 1129/16, 8 February 2017, reference no.
I SA/Gd 1218/16; WSA in Gliwice of the day 9 August 2017, reference no. I SA/Gl 478/17; WSA in Warsaw on: 27 February 2017, reference no. III SA/Wa 400/16, 11 April 2017, reference no. III SA/Wa 377/16, 27 June 2017, reference no. III SA/Wa 1982/16, 23 August 2017, reference no. III SA/Wa 2976/16, 25 August 2017, reference no.
III SA/Wa 2627/16, 5 September 2017, reference no. III SA/Wa 2625/16, 19 September 2017, reference no. III SA/Wa 3019/16, 20 September 2017, reference no. III SA/Wa 3036/16, 9 November 2017, reference no. VIII SA/Wa 559/17, 22 November 2017, reference no. III SA/Wa 2631/16.
On the other hand, the adverse position is contained in the following judycats: NSA in the judgment of 27 June 2017, reference no. II FSK 658/17, as well as WSA in Bydgoszcz on 23 November 2016 (judgment preceding NSA ruling) reference no. I SA/Bd 719/16, WSA in Wrocław by day 16 November 2015, reference no.
I SA/Wr 1563/15, WSA in Łódź by day 17 November 2016, reference no. I SA/Łed 743/16, WSA in Poznań by day 27 April 2017, reference no. I SA/Po 1447/16 and WSA in Warsaw of 28 September 2017, reference no. III SA/Wa 2629/16 and 29 November 2017, reference no. III SA/Wa 3316/16, and of 18 December 2017 reference no. III SA/Wa 164/17.
Author: Aleksandra Księżyk – Legal advisor, Director of the Legal Department in Warsaw Chancellery Russell Bedford Dmowski and Partners Law Firm sp. k.