Exit tax - the most important changes in income taxes 

Agata Nieżychowska

Exit tax - taxation of unrealized capital gains

The new taxation rules, which are in force from 1.01.2019,  are subject to:

  • transfer of assets or their part(s) outside Poland, for instance transfer of assets associated with Polish based activities to a foreign company, as a result of which Poland will partly or entirely lose the right to tax the proceeds from their disposal 
  • change of tax residence, as a result of which Poland will partly or entirely lose the right to tax income (irrespective of whether the asset was actually disposed of or not) will be subject to this new tax – exit tax. The surplus of the market value of the transferred asset over its tax value (value not recognized previously as tax deductible costs, in any form, that would have been treated by the taxpayer as tax-deductible cost had it been sold) will be treated as tax base. 
Introduction of exit tax is related to the implementation of the ATAD Directive on counteracting tax avoidance. However, Polish regulations went beyond the directive and the new tax also covers individuals.
In case of individuals 2 rates of exit tax are provided: 3% applicable when the tax value of the asset is not determined, and 19% for financial assets over 4 million PLN. As regards legal persons the rate of 19% will apply.

The new regulations provide that the taxpayer may receive a refund of the exit tax paid. This will be possible if within 5 years (from the end of the month of the transfer of the assets), they are transferred back to Poland. In the case of tax residence, if within 5 years (from the end of the tax year in which the tax residence has changed), the taxpayer becomes a tax resident in Poland again.

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Agata Nieżychowska
Agata Nieżychowska
Tax Director