Starting from 1 January 2021 (or from 1 May 2021, depending on the decision of the partners), limited partnerships have become CIT payers. Therefore, according to the general ruling of the Minister of Finance, partners of limited partnership (spółka komandytowa) and general partnership (spółka jawna), upon meeting certain conditions, may be exempt from dividend taxation.
Who can use the exemption?
One of the conditions for the application of the tax exemption is direct holding of at least 10% of the shares in the capital of the profit-paying partnership for an uninterrupted period of at least two years.
Moreover, the period of a limited partner’s holding of a share in the profit of a limited partnership should only be counted from the moment the limited partnership becomes a CIT payer (i.e. in practice from either 1 January or 1 May 2021), and not from the actual acquisition of all rights and obligations (share in profit) in the limited partnership.
When is it possible to apply the exemption?
It will be possible to apply the exemption if the profits paid to the limited partner are paid for a period in which the limited partnership was a CIT payer and all the conditions set out in Article 22(4) of the CIT Act have been met at the same time, i.e.
- the partnership paying the dividend has its registered office or management board in Poland;
- the partnership earning the revenue from dividends is subject to income tax;
- the partnership earning income from dividends holds directly no less than 10% of shares in the capital of the partnership/company disbursing the dividends;
- the partnership earning revenue from dividends does not enjoy an exemption from income tax on all its revenue, irrespective of the source of its revenue.