Accounting

Tax on share purchase in Poland

Accounting


Tax on share purchase in Poland

Share deals concerning sale of limited liability company's shares are subject to tax on civil law transactions. The purchaser is subject to a tax obligation which arises at the moment of signing a sale agreement. He has 14 days from this moment to file a tax return (PCC-3 form), tax calculation and tax payment. Tax return shall be filed with the tax office competent for the place of residence or the address of company's registered office. Notaries are subject to PCC exclusively on activities conducted in a form of a notarial deed. Therefore preserving an appropriate written form with signatures certified by a notary shall not release the purchaser from the PCC obligations. A taxable base shall be the market value of the shares. It is determined on the basis of an average price used in the trade of civil rights of same kind on the same day the act is executed less debts and burdens. It is determined by art. 6 sec.2 of the PCC act. Share price may, but it is not required, to be equal to its nominal value. Nominal value shall not be equated with the market value of the share. Market value of the share may be higher or lower than its nominal value if the status of the company's assets justifies such a  price. If the nominal value of shares acquired by a Reader corresponds with their market value referred to in art. 6 sec.2 of the PCC act, it shall be the taxable basis for calculating PCC.

However, it must be taken into account that the revenue office is authorized to question the value of shares declared by the purchaser. In a situation when the tax office makes an assessment that the value declared by the taxpayer does not correspond with the market value, it shall request to increase or decrease it within a time limit no shorter than 14 days from the day the request is delivered having previously stated the value according to his own initial assessment.

1% percent PCC rate on the sale of limited liability company shares contract

If the taxpayer, despite the above mentioned request, has not determined the value or has submitted the value not corresponding to the market value, the revenue office shall assess its value taking into account an expert opinion or an appraisal's valuation provided by the taxpayer. Expert drawing up an opinion shall be guided by the criteria under art. 6 sec.2 of the PCC act. In other words, a requirement to determine the market value based on the estimate of an expert does not authorize the tax office to freely shape the market value of the object of the legal act being detached from realities prevailing on the market trading in said goods. The taxpayer shall be obligated to cover the cost of the appointed expert estimate in a situation when the value determined while taking into account his opinion shall differ by more than 33% from the value provided by the taxpayer. 

 

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Mieszko Łukaszewicz

Lawyer

Mieszko Łukaszewicz

Tax adviser, Counsel

Mieszko Łukaszewicz