Limited - join - stock partnership are taxable to CIT
Limited - join-stock partnership are taxable to CIT
On 1 January 2014, the Act to impose an income tax from legal persons on a limited joint - stock partnership (spółka komandytowo – akcyjna, SKA) entered into force. This is a ground-breaking change, because this is a partnership which so far were not subject to the income tax from legal persons and therefore probably the popularity of this partnership will significantly fall. The amendment was introduced by the Act of 8 November 2013 amending the Law on Corporate Income Tax law, the Law on income tax from individuals and Tonnage Tax Act (Journal of Laws of 2013, sec. 1387). The legislature has not decided, contrary to earlier plans, the imposition of income tax from legal persons also on a limited partnerships.
So currently the partnership is taxed not only at the level of the shareholders (personal income tax), but also at the level of the partnerships itself (company tax). This means that for the purposes of the CIT the SKA will be similar to the current tax rules for companies.
Unfavorable to taxpayers legal solution was introduced after extensive and safe use of this partnership became possible once the Supreme Administrative Court resolution from 16 January 2012 (II FPS 1/11) was adopted with respect to the shareholder who is a legal person and from 20 May 2013 (II FPS 6/12) to the shareholder who is a natural person. Pursuant to these resolutions, the income of the shareholder of the SKA is taxed only on the receipt of dividends, and not at the time when it becomes due to the company. As a result, it was possible to accumulate profits in the limited – join-stock partnership, which were not taxed on the side of the partnership or the shareholders in accordance with the accrual basis. A shareholder does not have to also pay the advance payment of income tax in the longer time the revenue due.
Given the popularity enjoyed in recent years, this partnership may be assumed that the number of newly established ones will significantly decrease.