Tax on so-called shifted profits may be a new, challenging item on the “tax burden” agenda that can be levied on a Polish company making intra-group settlements.
Moreover new provisions require certain additional conditions to be met. These concern i.a. tax amount paid by the payments’ recipient in its jurisdiction and structure of payments’ flow (e.g. if payments are subsequently distributed as dividend or dividend like payment)
If given stream of payment is considered “shifted profit”, Polish company may be obliged to pay 19% CIT on its value (certain deductions are possible e.g. paid WHT)
Exclusion concerns however a payment recipient being tax resident in EU / EEA jurisdiction, provided that he conducts in its resident country significant genuine business activity.
In practice new provisions may be in particular burdensome for companies from Switzerland, UK or USA (and other non-EU/EEA countries). At the same time vague wording, of the provisions will require case by case analysis to properly asses the final impact.
In our view tax on „shifted profits” will be a challenging compliance burden for Polish taxpayers making group payments. We could help you in:
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