Poland: Tax update
The Polish government introduced draft legislation establishing an exit tax—a levy on unrealized income when residents or assets depart Poland. This measure implements EU Anti-Tax Avoidance Directive standards and was anticipated to take effect January 1, 2019.
Scope and Application
The exit tax applies when tax residency changes or assets move abroad, resulting in Poland losing taxation rights on potential capital gains. Both corporate and individual taxpayers face these rules under specified conditions. Asset transfers between headquarters and permanent establishments may also trigger taxation.
Tax Rates and Thresholds
Corporate taxpayers face a 19 percent tax calculated on asset market value at exit. Certain transfers escape taxation: those under 12 months related to liquidity management, loan repayment security, or EU capital requirements for financial institutions.
Individual taxpayers pay 19 percent on business-related asset transfers. For non-business assets—shares, stocks, securities, and partnership rights—a three percent rate applies only if the owner maintained Polish domicile for at least five years.
Key Considerations
The Polish framework extends beyond ATAD requirements by including natural persons, whereas EU directives primarily target corporate entities. The legislation creates potential risks in cross-border mergers, acquisitions, and restructuring transactions affecting Polish taxpayer residency or asset ownership.
Foreign businesses operating Polish permanent establishments require careful attention, particularly those in construction and drilling sectors that temporarily relocate assets.