Global Tax Alert | 16 October 2013

Polish limited partnerships expected to remain tax transparent in 2014

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Changes in the taxation of certain tax transparent partnerships in Poland have been discussed for the last year and a bill has finally reached the parliamentary level.

One of the major changes that were planned under the Ministry’s of Finance bill amending the Corporate Income Tax (CIT) Act was taxation of limited joint stock partnerships and limited partnerships. Under current rules both types of partnerships are transparent for CIT purposes.

The amended bill that was accepted during last week’s discussion at the parliament finance committee session provides that limited partnerships will remain tax transparent. Only limited joint stock partnerships are designated to become taxpayers starting from 1 January 2014 (with exceptions subject to grandfathering rules).

The change in taxation of limited partnerships has been expected by many taxpayers running their business activity through such entities. Maintaining this type of entity as tax transparent would maintain the single taxation of profits earned through partnerships (without additional taxation upon distribution from the partnership).

The bill will undergo further legislative review and approvals and should be signed by the President and published in the Journal of Laws by the end of November 2013 in order to be in force as of 2014.

Future Alerts will cover further developments.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Doradztwo Podatkowe sp. z o.o., Warsaw
  • Andrzej Broda
    +48 225 57 72 90
    andrzej.broda@pl.ey.com
Ernst & Young LLP, Polish Tax Desk, New York
  • Michał Koper
    +1 212 773 7012
    michal.koper@ey.com

EYG no. CM3888