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Real estate companies and participation exemption - proposed changes

Draft of changes to Polish income taxes published in July 2017 extends the real estate clause and reduces the scope of participation exemption for dividends.


1.    Under the real estate clause, income on disposal of shares in real estate companies (real estate constituting more than 50% of assets) is taxable in Poland.  

It is proposed that also other income from shares in real estate companies and partnerships as well as real estate investment funds will be taxed in Poland, as for example:   

i.      redemption of shares;

ii.     liquidation of the legal entity;

iii.    stepping out from the partnership;

iv.   reduction of capital in the partnership.

2.    The scope of the participation exemption will be limited only to dividends. Redemption of shares or liquidation will be excluded from the exemption.


The above rules will be used only if the applicable tax treaty does not state otherwise.


According to the draft, amendments will come into force from 1st January 2018.




Should you be interested in obtaining further information, or would like to discuss the impact of the above changes please contact:


Monika Dziedzic      tel. + 48 22 322 68 88


or your advisor at MDDP.

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