Polish Deal: Polish Holding Company – planned tax preferences
"Foreign investments will flow to Poland if we create an attractive tax system," writes the Ministry of Finance on its website. Hence the idea that Polish Holding Company (PSH) would gain new preferences.
According to the announcements of the Ministry of Finance, it is planned to introduce the institution of the so-called Polish Holding Company. The most important preference for this form – according to Łukasz Kupryjańczyk and mentioned in the announcements, is the lack of taxation on the sale of shares or stocks in its subsidiaries. Today, if the parent company decides to sell its daughter company, it pays 19% CIT on the sale. After the changes, PSH is to receive a CIT exemption for profits from the sale of shares in its subsidiaries.
– It can actually be a big change. Today the tax is 19%. After the amendment of the regulations, tax would be lifted. The question of details, i.e. the conditions that will have to be met in order to take advantage of such an exemption. These will be possible to evaluate after the publication of the draft amendment – adds Łukasz Kupryjańczyk.
– There is also to be a tax exemption for 95% of dividends received by PSH from a subsidiary of a non-EU country. Companies from the EEA and Switzerland are tax exempt and third country investors must pay tax on the entire amount they receive. After the change, the tax would be reduced to 5% – emphasizes Łukasz Kupryjańczyk, tax advisor, partner at Thedy & Partners.
The announcements of the Ministry of Finance also show that companies from the European Union will also benefit from the change. They will be able to decide whether they will benefit from the total tax exemption after two years of share ownership or the 95% tax exemption after one year – although this is a rather rare case.