The transformation of a limited partnership into a general partnership is a way to avoid CIT taxation – confirms the Ministry of Finance in a reply given to Dziennik Gazeta Prawna.

Due to the fact that limited partnerships are subject to CIT tax, many entrepreneurs are looking for a remedy for double taxation. More and more entrepreneurs decide to transform a limited partnership into a general partnership. However, the obstacle was the interpretation problems related to the new regulations, which in some cases impose the obligation to settle CIT also on general partnerships. Art. 1 sec. 3 point 1a of the amended CIT Act, orders general partnerships whose partner is a limited liability company to submit the CIT-15J information before the beginning of the financial year, and in the event of any changes in the composition of shareholders – within 14 days of this change. The sanction for failure to submit CIT-15J information is that the general partnership is subject to the CIT regime.

The provisions of the CIT Act do not regulate the situation of the general partnership resulting from the transformation, which includes the limited liability company. rotary ”referred to in the regulations.

However, the position of the Ministry of Finance shows that in the case of the transformation of a limited partnership with the participation of a limited liability company, if the composition of partners does not change due to the transformation – the information CIT-15J is submitted by the limited partnership prior to registration of the transformation in the National Court Register. However, if the composition of partners changes, the information CIT-15J is submitted by the general partnership within 14 days from the date of registration. If the above-mentioned information CIT-15J is submitted within the specified time limit, the general partnership resulting from the transformation will not be subject to CIT.