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Polish Deal 3.0. Changes to the holding regime


The year 2022 was the first year of the so-called Polish Deal being in force, which introduced numerous and extensive amendments to a number of statutes. At the beginning of 2023, amendments came into force which have modified a considerable part of its initial assumptions, above all in respect of corporate income tax.The regulations on hidden dividend have been repealed, whereas certain amendments have been introduced concerning the Polish holding company and Estonian CIT. The amendment aims to make the tax regulations simpler, as well as less ambiguous and comprehensible for the taxpayer.

Since 1 January 2023, the changes have been in force that, according to the legislator, are to encourage the creation of holding companies on the territory of the Republic of Poland.   By way of reminder, holding companies mean Polish companies that inter alia hold a minimum a minimum of 10% shares in the capital of a subsidiary.

One of the most important changes concerning holding companies is exemption from taxation of all dividends received by a holding company from subsidiaries (formerly the exemption applied to 95% of the amount of such dividends). Another important modification is extension of the legal forms which a holding company may take. Eligible for the status of a holding company, in addition to the currently eligible joint-stock companies and (private) limited liability companies, will now also be the simple joint-stock company.

Since the beginning of the new year another amendment has been in force whereby dividends paid out by subsidiaries to the holding company are excluded from the ‘pay and refund’ mechanism. This means that in the event of dividend distribution in excess of PLN 2 million, it will no longer be necessary to first pay the tax and then seek its refund.

Another significant change involves removal from the definition of holding company of the minimum time period requirement for the holding of 10% of shares in a subsidiary. Under the former regulations, the period was a minimum of one year. At the same time, however, a regulation has been introduced whereby the conditions for an entity to be deemed a holding company or subsidiary must continue to be met for a minimum of two years prior to the date on which the revenue from dividend or sale of shares is received. In reality, this means that the above minimum term has been extended from one year to two years. Moreover, a negative condition has been removed whereby a subsidiary could only hold up to 5% shares in the capital of another company.

Presented above are merely the most important amendments to the holding-company regime, which in the intention of the legislator are to introduce a tax regime that is conducive to holding companies being located in Poland and to create a competitive fiscal environment. Whether such purposes can be achieved, it will become evident in the upcoming months.  


Oliwia Piórkowska, Tax Consultant, ATA Tax Sp. z o.o.

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