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Poland: Proposal for “exit tax”

Poland: Proposal for “exit tax”

A proposal from the Ministry of Finance would impose an “exit tax” on the transfer of assets from Poland or a change of tax residency.

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The exit tax would be imposed on: 

  • The transfer of an asset (including an enterprise or an organized part thereof) outside the territory of Poland if, as a result of the transfer, Poland would not be able to impose tax (wholly or in part) on income potentially derived from the sale of the asset, provided that the transferred asset remains the property of the same taxpayer.
  • A change of a taxpayer’s tax residence if, as a consequence, Poland would not be able to impose tax (wholly or in part) on income derived from the sale of an asset owned by the taxpayer as a result of the change of the country of residence (for natural persons) or the registered seat or the place of effective management (for legal entities) to another country.

The exit tax would not apply with respect assets that would remain with or in a permanent establishment located in Poland.

In the case of natural persons, the exit tax on personal property would apply only if a taxpayer has been a Polish tax resident for at least five years before the change of tax residence.

Exit tax calculation

The basis for the exit tax would be calculated as the surplus of the market value of the transferred asset, determined at the date of the transfer, over its tax value. The tax rate would be: 

  • 19% – for corporate and individual taxpayers if the tax value of an asset is determined
  • 3% – for individual taxpayers only if the tax value of an asset is not determined (i.e., if according to separate provisions, tax deductible costs on the transfer of an asset cannot be recognized)

In the case of natural persons, only the transfer of assets with a market value exceeding PLN 2 million would be subject to taxation (calculated in relation to an individual transaction or for several transactions conducted during a one-year period). For corporate taxpayers, the exit tax would be imposed regardless of the market value of assets.

Taxpayers would be required to file tax returns and report the amount of income subject to exit tax by the seventh day of the month following the month in which the income is realized. At this point, taxpayers would be required to remit the amount of the exit tax. It might be possible to pay the exit tax in installments, over a period of time not to exceed five years.

The proposed effective date would be 1 January 2019.

 

Read a September 2018 report [PDF 343 KB] prepared by the KPMG member firm in Poland

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