RSM Poland


Polish Deal: Preferences for Holding Companies

Reading time: 3 minutes.

From this article you will learn:

  • What advantages the regime of “holding companies” provides,
  • What anti-abuse clauses were introduced by the legislator,
  • Whether it is worth going for the suggested preferences or not.

Tax Manager at RSM Poland

Wawrzyniec ŻBIKOWSKI
Junior Tax Consultant at RSM Poland


We are going to continue here with the Polish Deal and tax changes planned for 2022. After the regulations offering simplified procedures in the choice of the Estonian CIT and the innovation support package, another noteworthy new option is preferences for holding companies. This proposal seems interesting, but a more careful analysis of the regulations shows that there are many hazards involved when it comes to these new preferences.

What are the new tax preferences all about?

At first glance, advantages seem to be substantial and include the following:

  • CIT exemption for 95% of income from dividends received by the holding company from its subsidiaries;
  • CIT exemption for profits generated by the holding company from sales of stocks and shares in its subsidiaries, provided that such sales are made to unrelated entities.

What conditions will holding companies have to meet?

Not every holding will be entitled to the above preferences. New regulations will apply only to those groups that meet criteria predefined in the CIT Act. The most important preconditions include the following:

  • The holding company is obliged to hold at least 10% of stocks or shares in a subsidiary for at least 1 year;
  • The holding company and its subsidiaries cannot apply zone exemptions (Special Economic Zone and Polish Investment Zone).

What is more, a shareholder of a holding company cannot be an entity based in a tax haven or in a country with which Poland has not signed a double taxation treaty, while a subsidiary cannot hold more than 5% of the shares in the capital of other companies.

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What to look out for when you opt for preferences?

The requirement that a subsidiary cannot hold shares in other companies means that only single-tier organisations will be eligible. What should be emphasised is that the explanatory memorandum does not exclude the possibility that the regulations may be extended in the future to include multi-level organisations, as well. Tax Capital Groups are also going to be excluded from new preferences.

In addition, the CIT exemption for profits from sales of stocks and shares shall not apply to “real estate companies”, i.e., entities where at least 50% of assets is real estate, either directly or indirectly.

What should be also noted here is that the taxable 5% of dividend income cannot be subject to the ‘standard’ CIT exemption for dividends (Art. 20 par. 3 and Art. 22 par. 4 of the CIT Act). Thus, the new regime is not going to provide a complete CIT exemption.

Not such a good change

When discussing the downside of the new regulations, it must be mentioned that the legislator has decided to introduce anti-abuse clauses which may greatly limit the number of entities interested in the regime of holding companies. For example, the CIT exemption for dividends shall not apply if the subsidiary obtains at least 33% of its revenue from passive income (i.e., from loans, sureties and guarantees and other capital gains).

Additionally, a holding company must run real business activity and have, for example, sufficient assets and human resources required for such business. It may be problematic for holding companies to meet this requirement.

Taking the aspects of proposed changes I have discussed above into account, it seems that the regime of holding companies is not going to be a popular option, unless it is modified substantially. For many entities that can apply standard tax exemptions for their dividends, the new rules will simply be less attractive.

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