Global Tax Alert | 24 August 2018

Polish Ministry of Finance announces key changes to be proposed under 2019 tax reform

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Based on information recently announced by Poland’s Ministry of Finance, significant changes in the tax law are planned in Poland as of 2019.

The Ministry announced the following key measures, among others:

  • Introduction of the OECD1-compliant IP (intellectual property) Box regime providing a very low tax rate for qualified income earned as a result of various research and development activities.
  • Tightening of requirements for the application of the withholding tax (WHT) exemption on dividend, interest and royalty payments or preferential rates based on tax treaties.
  • Implementation of exit taxation based on the European Union Anti-Tax Avoidance Directive (timing is uncertain at this time).
  • Introduction of a notional interest deduction, allowing taxpayers deduct equity invested by their shareholders.
  • Implementation of WHT and capital gain tax exemptions on certain corporate bonds offered to foreign investors.
  • New rules of taxation for conversion of debt into equity.
  • Changes to the scope of the tax exemption for closed investment funds.
  • New rules regarding use of copies of tax residency certificates.
  • Adjustment of the General Anti-Abuse Regulation affecting the applicability of tax treaties.
  • Introduction of taxation rules for crypto-currency trade.
  • Amendments affecting the tax result of bad-debts trading.

Although the published information is general and the draft of an amending bill is still awaited, the announced measures would likely have a very direct impact on the majority of multinational groups operating in Poland.

Future Alerts will report on developments in this area.

Endnote

1. Organisation for Economic Co-operation and Development.

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

Ernst & Young Doradztwo Podatkowe sp. z o.o., Warsaw
  • Andrzej Broda
    andrzej.broda@pl.ey.com
  • Marcin Opilowski
    marcin.opilowski@pl.ey.com
  • Michał Koper
    michal.koper@pl.ey.com
Ernst & Young Doradztwo Podatkowe sp. z o.o., Wroclaw
  • Sebastian Ickiewicz
    sebastian.ickiewicz@pl.ey.com
Ernst & Young LLP, Polish Tax Desk, New York
  • Sylwia Migdał
    sylwia.migdal1@ey.com
  • Joanna Pachnik
    joanna.pachnik1@ey.com
  • Paula Przybielska
    paula.przybielska1@ey.com
Ernst & Young LLP, Polish Tax Desk, London
  • Marta Kedziorska
    marta.kedziorska@uk.ey.com

EYG no. 010910-18Gbl