Exit tax also for natural persons

Although there is no access yet to the draft version of the act regulating the so called “exit tax”, namely the tax generally connected with movement of tax residency, but also an entire business or its part, to another country, we are learning more about the structure of the tax which is planned by the tax authorities.

On 13 August 2018, The Ministry of Finances, in response to the parliament enquiry no. 24057 concerning the works on development of the regulations implementing Council Directive 2016/1164 of 12 July 2016 laying down the rules against tax avoidance practices tat directly affect the functioning of the internal market (hereinafter: ATAD) confirmed that the scope of tax in Poland will be wider than required under ATAD which generally covers only CIT taxpayers, and will include also natural persons – PIT taxpayers.

The Ministry of Finances emphasised that it would be justified to introduce the so called “exit tax” towards natural persons, in particular within the scope of shares or stocks held by them in capital companies. Simultaneously, the Ministry stated that the currently conducted legislative works include consideration of introduction of a high amount threshold (without precise specification) which, when exceeded, will result in taxation of the economic value of the assets held by natural persons changing their tax residency.

It should be noted that the tax authorities intend to introduce new taxation rules already from 1 January 2019 which means that the decision concerning the choice of jurisdiction to conduct the future business or economic projects becomes very topical.

If you are interested in the above issues, you are welcome to contact the experts from SSW Pragmatic Solutions.