Special Economic Zones in Poland: A company operating in zone a may be a member of a tax-consolidated group
The tax incentives introduced in Poland are meant to stimulate certain behaviour of taxpayers. They aim at supporting certain types of businesses and sectors of the economy. The tax incentives include, among others, income tax relief for the business activity pursued in a Special Economic Zone in Poland as well as fiscal preferences enjoyable in connection with the functioning within a tax-consolidated group.
The tax authorities have often challenged the use of the two tax preferences concurrently claiming that doing business in a Special Economic Zones in Poland precludes the benefits offered by a tax-consolidated group.
New rulings by the Supreme Administrative Court (file no. II FSK 1353/12 and II FSK 1958/12) published on 7 May 2014 undermine this thinking. The court held that the income earned in special economic zones was tax-exempt under Article 17(1)(34) CIT Act. Therefore, if a tax-consolidated group member, which had obtained a permit to operate in a special economic zone after 1 January 2001, enjoyed that exemption, this did not violate the condition referred to in Article 1a(2)(3)(a) CIT Act and did not make the group lose its status of an entity taxable with the corporate income tax in line with Article 1a(10) CIT Act.
We all hope that in the context of these rulings the tax authorities will adopt a uniform, taxpayer-friendly approach. Examples include some of the most recent advance tax rulings by the Director of Tax Chamber in Poznan of 04/08/2014 no. ILPB3/423-423/11/14-S/MM and of 23 September 2014 no. ILPB4/423-144/11/14-S/ŁM in which the chamber shared the above-mentioned view of the SAC.
The rulings in question confirm that you may enjoy the two tax preferences if your Special Economic Zone permit was issued after 1 January 2001.
In case of further questions, please do not hesitate to contact us. Our tax advisers working in Rödl & Partner offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw will gladly review your tax documentation related to your investment in a Special Economic Zone and propose a solution allowing minimising your tax risks. We are also on hand to answer any other tax-related questions you may have. Our offices offer legal advice in Poland with conducting business within a SEZ and with any other aspects of your operations.