Download Poland publishes new regulation on nonresident capital gain

28 April 2016
Global Tax Alert
Poland publishes
new regulation
on nonresident
capital gain tax on
Polish securities
EY Global Tax Alert Library
Recently, the Polish Minister of Finance published a draft bill specifying Polish
source of income rules for the corporate income tax (CIT) purposes.
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The proposal includes certain types of income; however the list is open-ended.
The examples include income (revenue) from:
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•Direct or indirect transfer of shares (stock), participation rights in partnership’s
profit, investment fund certificates, in which real estate located in Poland,
constitutes at least 50% of the total value of assets
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•Securities and derivatives listed on stock exchange market in Poland, including
income (revenue) from sale or execution of rights resulting thereof
If the bill is implemented as drafted, nonresident corporations trading in Polish
listed securities or shares of Polish real estate rich companies, absent tax
treaty protection, will be obliged to pay 19% CIT in Poland on revenue less tax
base (established depending on the form of acquisition of shares/securities),
beginning 1 January 2017.
The current legislation lacks explicit provisions on the subject matter; though
prevailing practice has confirmed that stock exchange listed shares should
be subject to tax in Poland. The proposed legislation explicitly confirms this
approach.
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Global Tax Alert
At the same time the new proposal does not provide specific
regulations for gains on non-listed securities, therefore,
although the tax authorities may still claim that they are
taxable under the general CIT rules, in some cases more
beneficial treatment may still be achievable (subject to
case-by-case assessment).
There might be further, case dependent opportunities,
which allow investors to secure efficiency of their Polish
investment.
Future Alerts will report on legislative developments.
The overall outcome of the new legislation would be that
foreign investors using non-treaty locations should be
prepared to register and pay tax in Poland (on capital
gains as well as on dividends).
For additional information with respect to this Alert, please contact the following:
Ernst & Young Doradztwo Podatkowe Sp. z o.o.,Warsaw
• Marcin Opilowski
• Michał Koper
+48 22 557 73 56
+48 22 557 70 24
Ernst & Young LLP, Polish Tax Desk, New York
• Sylwia Migdal
+1 212 773 0095
[email protected]
[email protected]
[email protected]
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