The Polish Government recently announced that it made several proposals to amend the Personal Income Tax Act to include a new taxation method for the employee incentive programs. This change is only one of those included in the amended Act, which will enter into force starting with January 1, 2018. One of our lawyers in Poland can help you understand these changes.
The share-based incentive program in Poland will be changed
The proposed amendments will be largely focused on changing the condition for deferring the applicable income tax imposed on the acquisition of shares. According to the proposed changes, this tax would be levied at the moment of the sale.
If adopted in the manner in which it was proposed, the change would apply only to those taxpayers in Poland
who purchase shares in joint-stock companies with their registered office in an EU country or an EEA country.
The changes proposed in the 2018 amendment also include the fact that the employee incentive program implemented in Polish joint-stocks
will need to be discussed and based on a General Shareholder’s Meeting. Right now, the law only requires the shares to be granted by a resolution. Moreover, the individuals who could benefit from this incentive program would be only those who receive income as per a civil law contract.
Tax deferral does not apply in case of private limited liability companies in Poland. One of our Polish lawyers can give you more details.
The importance of the new changes to the PIT Act
The main changes proposed by the amendment include the need to re-qualify the income received from the applicable incentive programs in 2018. Should companies fail to comply with the conditions for deferral, this income derived from acquiring shares will be taxed at progressive rates.
As a result of these changes, some companies may have new taxpayers’ obligations. One of our attorneys in Poland can give you more information.