The latest government project is a surprise to the huge number of entrepreneurs operating in the form of limited partnerships. From the published list of legislative and program works of the Council of Ministers, it can be concluded that the government plans to cover limited partnerships with CIT from the beginning of 2021.

The surprise for taxpayers is all the greater as there have been no reports from the government regarding this direction of changes in tax law. According to the published information, the purpose of the act is, inter alia, introduction of: “provisions tightening the income tax system through, inter alia, including within the scope of the CIT Act, limited partnerships with their registered office or management board in the territory of the Republic of Poland and those general partnerships in the case of which income tax payers participating in the profits of such general partnerships are not disclosed ”. It was further indicated that the project aims to “tighten the tax system and respond to optimization structures created by taxpayers with the use of limited partnerships by granting the limited partnership the status of an income tax payer”.

Limited partnerships do not have legal personality, therefore they have never been taxpayers of corporate income tax (CIT). Income tax on the income of these companies is paid directly by the partners, proportionally to the share in the profits – general partnerships, partnerships and civil partnerships are treated analogously. Nevertheless, the idea of ​​taxing the CIT of limited partnerships appeared in the past, when in 2014 the legislator decided to apply CIT to limited joint-stock partnerships. Back then the original intention was to extend this tax also to limited partnerships.

At the moment, no draft act has been published in this regard, and we only have the above-mentioned message included in the list of legislative and program works of the Council of Ministers. Therefore, we do not know any details of the plan to cover limited partnerships with CIT, including whether the limited partnerships will be completely equated with capital companies, or other mechanisms will be introduced.

The announcement of fundamental changes in the tax settlement of limited partnerships 4 months before their planned entry into force does not deserve approval and raises many doubts. Entrepreneurs, including a large number of Polish private companies operating in the form of limited partnerships, will once again be forced to analyze the effects of the new regulations in a very short time. The lack of any details of the CIT coverage of limited partnerships increases the uncertainty as to the future legal status and the intentions of the legislator. This raises doubts as to whether it will not simply lead to an increase in the taxation of income of (mainly Polish) enterprises in a difficult economic situation due to COVID-19.