Corporate Tax 2010 - BMR Advisors

Gide Loyrette Nouel Warsaw
Poland
Moreover, the Polish VAT Act defines certain cases when input VAT
is not recoverable in principle (e.g. purchase of a passenger car or
fuel for such cars, purchase of hotel and gastronomic services etc.).
2.5 Are there any other transaction taxes
Apart from VAT, Polish regulations provide for another
transactional tax - a transfer tax (podatek od czynnoci
cywilnoprawnych). Transfer tax is levied on a closed catalogue of
civil law activities and transactions (including sale, exchange and
loan contracts) and on certain operations resulting in the
establishment or increase of share capital of companies and
partnerships.
The rate of transfer tax differs according to the type of transaction:
the sale (exchange) of goods and property rights connected
with real estate (i.e. perpetual usufruct or ownership), loan
agreements - 2%;
increase of share capital - 0.5%; and
sale (exchange) of other property rights - 1%.
If at least one of the transactional parties is considered to be a VAT
payer with respect to this transaction, the transaction will be out of
the scope of the transfer tax (this rule does not concern the
transactions regarding real properties that are subject to VAT
exemption).
As a rule, most restructuring transactions, such as the in-kind
contribution of part of an enterprise or a qualified number of shares,
as well as loans granted by shareholders to its subsidiaries, are
exempt from transfer tax.
2.6 Are there any other indirect taxes of which we should be
aware
Polish tax law provides for an excise tax settled by companies
selling or importing certain goods, i.e. alcoholic beverages, tobacco
and mineral oil (petrol, gasoline, and other oil derivatives). The tax
payable is calculated on an amount per unit sold basis, or as a
percentage of the price.
There is also a gambling tax imposed on certain gambling activities,
lotteries and random games. The activities subject to this tax are
VAT exempt.
3 Cross-border Payments
3.1 Is any withholding tax imposed on dividends paid by a
locally resident company to a non-resident
Dividends paid to foreign shareholders are subject to a 19%
withholding tax, unless the provisions of a relevant tax treaty state
otherwise, or unless the qualified shareholder from the EU (or
Switzerland, Norway, Iceland or Lichtenstein) applies for
exemption, as provided by the Polish CIT Act. In order to benefit
from exemption or a reduced rate of withholding tax, the foreign
shareholder must provide the Polish company with an eligible
certificate confirming his tax residence.
criteria) applies for a preferential rate (from July 2013 - exemption
from withholding tax), as provided by the Polish CIT Act. In order
to benefit from a reduced rate of withholding tax, the foreign
beneficiary must provide the Polish company with eligible
certificate confirming his tax residence.
Royalties paid by Polish companies or Polish PE’s to non-resident
shareholders being companies from the EU may benefit from a
preferential 5% withholding tax rate if the company being the
beneficiary of the royalties holds directly at least 25% of the shares in
the paying company for an uninterrupted period of at least two years
(this condition does not have to be met at the date of the transaction).
3.3 Would there be any withholding tax on interest paid by a
local company to a non-resident
Interest paid abroad is subject to 20% withholding tax, unless the
relevant tax treaty states otherwise, or unless the beneficiary (being
shareholder from EU meeting certain additional criteria) applies for
a preferential rate (from July 2013 - exemption from withholding
tax), as provided by the Polish CIT Act. In order to benefit from a
reduced rate of withholding tax, the foreign beneficiary must
provide the Polish company with an eligible certificate confirming
his tax residence.
Interest paid by Polish companies or Polish PE’s to non-residents’
shareholders being companies from the EU may benefit from a
preferential 5% withholding tax rate if the company being the
beneficiary of the interest holds directly at least 25% of the shares
in the paying company for an uninterrupted period of at least two
years (this condition does not have to be met at the date of the
transaction).
3.4 Would relief for interest so paid be restricted by reference
to “thin capitalisation” rules
Where debt finance is three times greater than the value of the
company’s share capital (i.e. debt/share capital ratio greater than
3:1), thin capitalisation rules apply to interest paid to shareholders
holding at least 25% of shares in capital of the company or a sister
company held by the same parent company (“qualified
shareholders”). As a result, interest on such loans is not recognised
as a tax deductible cost in the portion in which the loan exceeds the
debt/share capital ratio referred to above.
The regulations refer to both domestic and foreign loans.
Any amounts uncovered, or covered only by shareholders’ debt
claims on the company, are excluded when calculating the value of
share capital for the purposes of 3:1 ratio.
For thin capitalisation purposes, a “loan” is deemed to be any kind
of debt claim, including debt securities and certain deposits.
3.5 If so, is there a “safe harbour” by reference to which tax
relief is assured
Thin capitalisation rules do not interfere with the tax relief
concerning interest payments abroad, as they concern only the issue
of tax deductibility of the interest paid by the Polish company.
Poland
3.2 Would there be any withholding tax on royalties paid by a
local company to a non-resident
Royalties paid abroad are subject to 20% withholding tax, unless
the relevant tax treaty states otherwise, or unless the beneficiary
(being a shareholder from the EU meeting certain additional
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3.6 Would any such “thin capitalisation” rules extend to debt
advanced by a third party but guaranteed by a parent
company
No, such a situation will not be subject to Polish thin capitalisation
restrictions.
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