Less paperwork when selling shares – planned changes at the Polish Holding Company

The Polish Holding Company (PHC) is an institution that was supposed to encourage the establishment of holding structures in Poland by offering CIT exemption for dividends and income from the sale of shares in subsidiaries. The planned amendment to the regulations may make it easier to take advantage of this solution. The Ministry of Finance has proposed abolishing the obligation to submit a declaration of intent to take advantage of the tax exemption when selling shares, which is one of the formal conditions for applying the preference.

Removal of the declaration obligation

According to the information contained in the list of legislative work of the Council of Ministers, work is underway on an amendment to Article 24o of the Corporate Income Tax Act. The Ministry of Finance announces the removal of the requirement to give prior notice of the intention to take advantage of the exemption on the sale of shares by a holding company.

Currently, the regulations require that such a declaration be submitted at least five days before the planned transaction. In practice, this sometimes constitutes a significant obstacle, especially in the case of dynamic transactions. The proposed amendment is intended to remove this restriction and increase the flexibility of the PHC regime.

The draft is expected to be adopted by the Council of Ministers in the third quarter of 2025.

What is a Polish Holding Company?

The PHC regulation has been in force since the beginning of 2022. Its purpose is to support the development of holding structures based in Poland. Companies that meet certain conditions can benefit from CIT exemption both on the sale of shares in subsidiaries (to an unrelated buyer) and on dividends received, both domestic and foreign.

The basic conditions include, among others, an appropriate period of share ownership (at least two years), no links with companies from so-called tax havens, and requirements regarding the location of subsidiaries.

Significance of the change

The removal of the obligation to submit a declaration prior to the transaction will eliminate the risk associated with failure to meet the formal deadline, which could result in the loss of the right to exemption, regardless of whether the other material conditions are met.

The change is part of the government’s broader deregulation plan, which includes the elimination of unnecessary administrative barriers and increased transparency of tax regulations. This will be yet another amendment to the PHC regulations, which may contribute to wider use of this mechanism by Polish and foreign capital structures.

Summary

The planned amendment to the Polish Holding Company regulations is a positive signal for entrepreneurs and investors. The removal of the obligation to submit a prior declaration of intent to use the exemption when selling shares will reduce the risk of formal errors and simplify the procedure, while achieving the objective that PHC was intended to serve from the outset: to create competitive tax conditions for capital investments in Poland.

***
Polish Holding Company – MDDP support

At MDDP, we provide comprehensive support to clients in the planning and implementation of both domestic and international holding structures.

Please contact us if you are interested in an analysis of the conditions for applying the Polish Holding Company regime or in planning transactions using this preference.

#MORE on our website >> Polish Holding Company (PHC).