Abstract

Payments received by the Polish corporate income tax taxpayers from supplementary capitals of their foreign subsidiaries, which are not sourced in the profits generated by these subsidiaries (including share premium), are treated by the Polish tax authorities as regular income taxed according to the general rules. However, based on the literal wording of art. 10 sec. 1 of the Polish CIT Act, such income should be qualified as an income in share of profits of a legal person, thus potentially benefiting from the tax exemption regulated in art. 20 sec. 3 of the Polish CIT Act. The administrative courts affirm such interpretation.