In recent days, the website of the Council of Ministers informed about the planned amendments of income tax regulations. According to the announcement, the prospective changes will involve CIT taxation of limited partnerships and, in special cases, of general partnerships.
Clearly, this is not good news for partners of limited partnerships, as tax transparency has been one of the main reasons why this type of partnership was so popular. We must recall here that the very idea of taxation of limited partnerships was already on the agenda several years ago, but it was ultimately decided that only limited joint-stock partnerships would be taxed with CIT. However, all the indications are that limited partnerships will now also have to pay CIT, perhaps even as early as from 2021.
Even though the details of the amendments have not yet been published, the assumptions behind it leave no doubt.
The Council of Ministers wants to make the tax system more effective, among others through “including limited partnerships having their registered office or the management on the territory of the Republic of Poland in the scope of the CIT Act”.
What is more, according to the initial assumptions of the draft, CIT shall apply also to “general partnerships, in which income tax payers participating in the profits of such general partnerships are not disclosed, meaning that these entities may evade income tax”.
For many taxpayers, some other changes may be relevant, as well. There are plans to introduce limitations in the deductibility of tax losses, an obligation for all CIT taxpayers to have a publicly available tax policy, 9% CIT rate available to taxpayers with an income of EUR 2 million instead of EUR 1.2 million, and bringing the national regulations on income sources of non-residents in line with international standards. There is supposed to be over ten amendments in total, most of which are aimed at making the tax system more effective, whereas just a few can be considered good for taxpayers.
Once the draft amendment is published, we will inform you about the details of the changes that are to be introduced.
Should you have any questions or need to discuss this topic further, we encourage you to contact our expert, Piotr LISS:
tel. +48 61 8515 766
fax +48 61 8515 786
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