The first reading of the Bill on the amendment of the Personal
Income Tax Act and the Corporate Income Tax Act, which was
submitted to the Sejm on 31 October 2016, took place in the Sejm on
4 November 2016. Among others, the Bill seeks to modify the
principles of taxation for investment funds, including the
annulment of the existing CIT exemption for revenues generated by
closed-end investment funds (FIZ). After the first
reading, the Bill was passed for a work in the Public Finance
As stipulated in the Bill, the existing CIT exemption for
entities such as investment funds and similar collective investment
institutions (i.e. foreign funds) will be replaced with tax
exemptions for revenues generated by opened-end investment funds
and specialized opened-end investment funds that meet specific
criteria (FIO and SFIO) from:
Dividend and other revenues from participation in the profits
of legal persons.
Transfer of receivables, foreign currencies, shares (shares of
stock) and other securities, including any derivative financial
instruments and the exercising of any rights vested therein.
As a result of the new exemption formula envisaged for such
entities as FIO and SFIO, with the simultaneous annulment of the
existing tax exemption for all the funds, the revenues of a FIZ and
those of a SFIO that operate based on the principles proper to a
FIZ will become subject to CIT at the rate of 19%. The 19% CIT will
also apply to the revenues of foreign collective investment
institutions the characteristics of which will correspond to the
features of FIZ.
The amendments are scheduled to take effect as of 1
January 2017. The Bill does not provide for any transition
periods. Hence, the modified rules of taxation will cover all the
investment funds that operate in Poland, notwithstanding their date
On the session of the Public Finance Committee, on 4 November
2016, the discussion took place, during which the Financial
Supervision Authority, the National Bank of Poland and the
government were asked to state their positions in relation to the
Bill. The resumption of the Commission of Public Finance is
scheduled for 14 November 2016.
At the current stage, it is possible that the Bill will be
modified and FIZes used solely as investment vehicles will still
benefit from CIT exemption, in opposition to FIZes created to reap
tax benefits, which would be subject to taxation on the basis of
the above principles.
Due to the fact that the abovementioned principles of taxation
may be subject to change as the Bill progresses further through
Parliament, we will monitor developments as they arise.
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