Relief for so called “consolidation”

What’s going to change?

Polish New Deal introduces a new tax relief for so called “consolidation”. 

Under new rules, tax payers will be able  to deduct from the tax base expenditures on the acquisition of shares/stocks in company with legal personality up to the amount of income obtained by the taxpayer (from a source other than capital gains), but no more than PLN 250 000 (c.a EUR 54k) in the tax year. 

What costs are eligible for the relief?

 Eligible cost are those directly related to acquisition of shares, intended for: 

• legal services and valuation of shares 
• notary, court and fiscal fees 
• taxes and other public liabilities paid both in Poland and abroad  

Non-eligible costs cover: remuneration paid for the acquisition of shares (stocks) or financing costs incurred in connection with the transaction. 

The CIT Act provides for the conditions for both the acquiring and the acquired company, which must be met in order to benefit from the relief. These concern i.a.: jurisdiction of the target, the subject of its activity,the minimum duration of its operation, or the acquiring a control interest in the company. 

The relief will be available under condition hat the acquired shares are held by the taxpayer claiming the relief  for a period of at least 36 months.