Act dated 7 October 2022 amending the Corporate Income Tax Act and some other laws, from 10 October He's waiting for the President's signature. From 1 January 2023 it is intended to introduce a number of significant modifications to the preferences provided for the so-called Polish Holding Companies.
Key changes concern the definition of a holding company and a subsidiary. We describe the most important of them.
According to the new wording of the rules, the role of a holding company will be able to be a simple joint stock company – so far only limited liability companies and public limited liability companies.
The holding company definition removes the holding period requirement 10% the shares in the subsidiary and the requirement not to benefit from the dividend exemptions provided for Under Articles 20(3) and 22(4) CIT Act.
On the margins, it can be noted that in the fiscal assessment expressed in the most recent individual interpretations[1], period of possession 10% a stake in a subsidiary should only be counted from the date of the entry into force of the provisions on the Polish Holding Company, i.e.
from 1 January 2022, not from the date on which the shares in such a company were actually acquired.
Given that this requirement will be abolished at the beginning of next year, it should be concluded that it was not possible to benefit from the tax preferences in question for the entire current year, as there was no actual possibility of holding 10% interest in a subsidiary for a period 1 year.
From 1 January 2023, As with the definition of holding company, the requirement for a period (annual) of holding will be abolished 10% a holding in a subsidiary.
The subsidiary may hold shares in the capital of another company in excess of 5% and all rights and obligations in non-legal companies.
The subsidiary will be able to benefit from exemptions for entities operating in a special economic zone, as well as exemptions for new investments and dividends already mentioned.
As of next year, the dividend exemption will apply to the entire dividend paid from the subsidiary rather than to date only 95%.
The amendment also provides for the addition of a provision whereby the requirements leading to the recognition of the entities concerned as holding companies or subsidiaries will have to be fulfilled over an uninterrupted period of time two years preceding the receipt of dividends or the disposal of shares. Thus, liberalisation of the existing rules creating an obligation to hold shares in a subsidiary for a period of time one the year is purely apparent because it will actually be extended by an additional year.
The amending act does not provide for any changes in the obligation to notify the head of the tax office of the disposal of shares for at least 5 the expected date of the transaction, which is one the main reasons for the exemption.
[1] e.g. individual interpretation by day 27 September 2022, sign: 0111-KDIB2-1.4010.174.2022.2.MK and the individual interpretation at 6 October 2022, sign: 0111-KDIB1-3.4010.456.2022.3.IZ.
Author: Jan Markowicz Lawyer, graduate of the Faculty of Law and Administration of the University of Silesia in Katowice in the direction of Law. In professional practice, it focuses on the legal and tax service of economic operators and individuals. Author of publications and articles on tax law.