Poland: Transactions involving alternative investment company

Ruling providing tax exemption applies to all manufacturing income

Ruling providing tax exemption applies to all manufacturing income

Recent tax-related developments concerning corporate taxpayers include the following:

  • A “clearance opinion” concerns a company that is to be granted the status of an “alternative investment company,” and that is to contribute to it all or part of the shares held by the applicant in other companies (as part of a share-swapping arrangement), and possible sale by the alternative investment company of all or part of the shares in the operating companies to a third party. According to the head of the tax administration, when engaging in these activities may be to obtain a tax benefit, the opinion of the tax administration concludes that these transactions are not contrary to the tax law and that the action described by the applicant would not be deemed to be “of artificial character.” The opinion identifying information is: DKP3.8011.33.2021 (24 May 2022). Read a June 2022 report prepared by the KPMG member firm Poland
  • The Supreme Administrative Court issued a decision in a case concerning whether an exemption provided pursuant to Article 17(1)(34a) of the corporate income tax law can be extended to the entire income from business activity as specified in a ruling granted to the taxpayer. The taxpayer had a favorable, positive ruling regarding investment support—a ruling that was issued in connection with the expansion of production capacity of an existing plant. The high court held that the exemption made available under the ruling could be applied to the entire amount of income from the manufacturing activity—and not just to the income derived from the new plant expansion. The court found that if the taxpayer were to satisfy all the requirements set out in the ruling and with regard to the requirements under the corporate income tax law on support for new investments, the taxpayer’s entire income from the activities specified in the ruling would be exempt from corporate income tax.  The case identifying information is: II FSK 357/21 (9 June 2022). Read a June 2022 report prepared by the KPMG member firm Poland

 

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