In accordance with the Polish Act of November 28, 2020, published on November 30, 2020 in the Journal of Laws of the Republic of Poland, amending the act on personal income tax, the act on corporate income tax, the act on flat-rate income tax on certain revenues earned by natural persons and Certain other acts (Polish Journal of Laws of 2020, item 2123), general partnerships which meet the following conditions will be subject to corporate income tax.

Clients of our accounting company PRWT interested in these changes ask our accountants about these issues, below are some comments on this subject.

General partnerships that meet the following conditions will be CIT taxpayers:

• the company has its seat or management board in Poland,
• at least one of the partners is not a natural person,
and
• the company does not submit to the Head of the Tax Office within the set time limit (before the beginning of each financial year) a statement – information according to the official formula about partners and non-partner taxpayers who achieve (indirectly, i.e. through non-taxpayers of income tax) income from the general partnership,
or
• the company fails to update the aforementioned information on persons who generate income from the company within 14 days of any change in the composition of taxpayers.

Information on taxpayers of general partnerships should be reported by these companies both to the heads of the Tax Office competent for their seat and to the heads of each taxpayer who obtains (directly or indirectly) income from shares in their profits.

The information should include not only the data of taxpayers who are taxpayers who earn income from the profit of a general partnership and taxpayers who earn income from the profit of the partnership indirectly, but also the data of entities through which taxpayers earn profits from the company and the amount of shares in the profits of these entities by taxpayers.

For example, when a partner of a general partnership is another general partnership that is not a CIT taxpayer, it will be necessary to identify and provide the partners of that partnership and the share of individual partners in its profits.

The first information general partnership will be required to submit by the end of January 2021, as of the first day of January 2021 (and in the case of companies that started operating after December 31, 2020, on the date of its commencement).

Violation of the obligation to submit information by January 31, 2020 will result in obtaining the status of a CIT taxpayer from January 1, 2021 (or from a later date of commencement of operations or from the date of a change of taxpayers not reported on time).

Importantly, obtaining the CIT taxpayer status will be permanent – until the company is liquidated or removed from the register without liquidation.

All general partnerships whose partners are not only natural persons should now prepare for the obligation to obtain the data necessary to prepare information about taxpayers earning income from profits generated in them, as well as for the need to provide ongoing access to data enabling timely updating of such information . It should be expected that in the practice of general partnership operation, the duties in this respect will be entrusted to financial and accounting services.

You run a general partnership, whose partners are not only natural persons, you can count on professional legal and accounting support from our PRWT accounting office to the extent necessary to cope with legal and tax changes.