Poland: taxation of restructuring operations

From 1 January 2009, a wider range of restructuring operations undertaken by capital companies have become exempt from the tax on civil law transactions.

Council Directive 2008/7/WE defines the restructuring activities which should not be subject to any form of indirect taxation. Exemptions have therefore been made available under the Tax on Civil Law Transactions Act 2000 for activities connected with:

• the merger of capital companies
• the conversion of a capital company into another capital company
• the making of contributions in kind to a capital company in the form of a branch or shares in another capital company in exchange for the company’s shares

However the third exemption does not seem to go far enough. Under the Directive, the exemption from indirect taxation extends to a capital company’s contribution of:

• all its assets and liabilities
• all assets and liabilities of a wholly-owned subsidiary
• one or more branches of activity

There is an obvious difference between the transfer of a branch ( a local office) and a branch of activity (a line of business). Taxpayers may therefore be able to rely on the Directive directly to claim exemption from tax on contributions consisting of a particular line of business.

Similarly, they may be able to rely on the Directive directly to claim an exemption for contributions consisting of the entire assets and liabilities of a wholly-owned subsidiary.

Law: amendments to the Tax on Civil Law Transactions Act of 9 September 2000; Council Directive 2008/7/WE of 12 February 2008