A Polish holding company is a legal entity which owns outstanding shares in another company. Usually, the holding company is not exercising any commercial activity, like providing goods or services but it’s especially created to own shares in other legal entities.
The investors are usually looking for certain advantages when opening holding companies
such as the exemption on paying withholding taxes on dividends
paid by the subsidiaries to the holding company
(situated in other country), the dividends income delivered by the subsidiary to the holding company must be subject to a smaller or even exempt corporate income tax
in the country of origin of the holding company
, a low or exempt rate of capital gains tax of the profits realized after selling the shares of the subsidiary company must be available.
The Polish investors can profit from the above if certain conditions are met such as the fact that the subsidiaries are already paying taxes in the country of origin, if the holding company is paying taxes in Poland or if the holding company located in Poland owns at least 15% of the shares of the subsidiary for more than two years in the row. The above conditions are specified in the Polish Corporate Income tax Law from the 1st of January 2007.
If the above are not compliant, than the company has to pay the corporate income tax of 19%.
The withholding taxes on dividends or interests and royalties
can be exempt or reduced by the provisions of the many double tax treaties signed by Poland
over the years or exempt by the regulations of the Parent-Subsidiary Directive (only on withholding tax on interest and royalty payments paid by Polish corporate residents
to subsidiaries located in EU countries). As a matter of fact, from the 1st of July 2013, the interests and the royalties won’t be taxed at all
if the above condition is met.