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Poland: Types of Company

Holding Companies

This page was last updated on 20 November 2020.

There are no ‘controlled foreign company’ rules in place in Poland, and no special tax regime is in place relating to holding companies.

Tax consolidation is permitted under Article 1A of the 1992 Corporation Tax Law (subject to restrictions on the type of companies wanting to consolidate for tax purposes, the share capital of the companies, the relationship between the group and the absence of tax debts). Cross-border consolidation, however, is not available.

For a country to be an attractive place in which to set up a holding company, four criteria must be satisfied:

  • Incoming dividends: incoming dividends the subsidiary remits to the holding company must either be exempted from or subject to low withholding tax rates in the subsidiary's jurisdiction.
  • Dividend income received: dividend income the holding company receives from the subsidiary must either be exempted from or subject to low corporate tax rates in the holding company's jurisdiction.
  • Capital gains tax on sale of shares: profits the holding company realizes on the sale of shares in the subsidiary must either be exempt from or subject to a low rate of capital gains tax in the holding company's jurisdiction.
  • Outgoing dividends: outgoing dividends the holding company pays to the ultimate parent corporation must either be exempt from or subject to low withholding tax rates in the holding company's jurisdiction.

Dividends are generally subject to a 19% rate, which can be reduced under a double taxation agreement (of which Poland has more than 80), and is removed altogether when paid to companies in EEA states, subject to the conditions of the EU parent-subsidiary directive.

 

 

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