Limited partnership subject to CIT soon?

In 2021, the completely new rules regarding the taxation of limited partnerships will probably be put into effect. In the list of legislative and programme works of the Council of Ministers, a statement was published to inform about the reasons and the need to introduce solutions to close the loopholes in the income tax system.

One of the proposed solutions is that the status of an income tax payer (CIT) should be granted to a limited partnership [spółka komandytowa] and to those general partnerships [spółki jawne] which do not disclose income tax payers participating in profits. It is also assumed that the so-called company tax policy has to be drawn up and disclosed. The aim of the actions taken by the government is to combat the so-called aggressive tax optimisation techniques used by entrepreneurs. Therefore, a number of sanctions for failure to perform or improper performance of obligations is likely to be introduced.

It was not specified in the statement whether the profit transferred from a limited partnership to a limited liability company [spółka z ograniczoną odpowiedzialnością] would be subject to a tax exemption. If not, the frequently used structure “sp. z o.o. sp.k.” will not make sense any more.

It seems that no transitional provisions will be introduced, with little time for any transformations.

You can read more on this issue [here]. 

Link to the statement of the Council of Ministers: [here].