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/ Tax Alerts Poland

Changes in the taxation of limited partnerships from 2014 apply only to limited by shares

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Date25 Nov 2013
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Tax news

At the meeting of the Technical Committee of the Polish parliament control systems on 09 October, 2013, the draft law amending the law on income tax has been verified (PIT) and corporate income tax (CIT). The original bill proposed that Polish limited partnership and limited partnerships are to be affected by shares from 01 January, 2014, with corporate income tax.

The committee members have supported that the new rules on the taxation of limited partnerships with corporate tax, should only apply to partnerships limited by shares. However, limited partnerships should continue to be exempt from the tax as unchanged. The significant factor was the reason that they are afraid to push through the dramatically increased taxation for existing limited partnerships to the business traffic, and actually limiting the Polish market attractiveness for investors.

The recommendation of the Sub-Committee by the Board of the Finance Committee has already been confirmed on 10 October, 2013. Thus, the pending bill passed with the amendments adopted at the next session of Parliament on 23 October, 2013.

The text introduced by the members of the Technical Committee Amendment has the outcome that only the limited partnerships by shares will be charged by corporate income tax from 01 January, 2014.

For the companies in question, it means that there will be two levels of income tax – similar to limited liability companies.(are introduced.) The first – taxation of the profit generated by the economic activity at the level of company taxation and the second at the level of the partners, the general partners and shareholders.

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