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28-07-2017
Profit participating loans – new taxation

Draft of changes to Polish income taxes published in July 2017 provides new rules for profit participating loans i.e. loans subject to interest related to the effects of the borrower.

 

1.    Interest obtained on profit participating loans will be considered as dividend like income.

2.    For PIT taxpayers, it means taxation of such interest with 19% flat-rate PIT.

3.    For CIT taxpayers, it means taxation of such interest with 19% flat-rate CIT, but with possibility to apply profit participation exemption on same conditions as for dividends.  

4.    Interest on profit participating loans will be non tax deductible for CIT taxpayers.

 

According to the draft, for taxpayers having a tax year as a calendar year, amendments will come into force from 1st January 2018.

 

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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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