PCC on the articles of association - when it is not necessary to pay?

The tax on civil law transactions is an indirect tax that must be paid, among others, by companies on the concluded company agreements and their amendments. The Act on tax on civil law transactions also provides for a number of activities that are exempt and exempt from PCC taxation. However, as it turns out, the act is not fully compliant with EU law - it allows in some cases to recover wrongly paid tax. Check when it is not necessary to pay PCC on the company agreement!

PCC - for what activities does the company have to pay it?

In the case of companies, the PCC tax should be calculated and paid on the following civil law transactions (this is provided for in Article 1 of the Act on tax on civil law transactions):

• company agreements,

• amendments to the articles of association, if they increase the tax base with the tax on civil law transactions - and the amendments to the articles of association are considered to be:

• with a partnership:

• making or increasing a contribution, the value of which increases the company's assets or increases the share capital,

• a loan granted to the company by a partner,

• additional payments and the partner's transfer of property or property rights for free use;

• in the case of a capital company - an increase in the share capital from contributions or funds of the company and additional payments;

• transformation or merger of companies, if their result is an increase in the assets of a partnership or an increase in share capital;

• transfer to the territory of the Republic of Poland from the territory of a non-member state:

• the actual management center of a capital company, if its registered office is not located in the territory of an EU Member State,

• the registered office of a capital company, if its actual management center is not located in the territory of an EU Member State,

- also when this activity does not result in an increase of the share capital.

As you can see, the range of the company's civil law transactions that are subject to PCC taxation is quite wide.

PCC from the articles of association - exclusions and exemptions

The Act on tax on civil law transactions also provides for such activities of the company that are excluded or exempt from PCC taxation.

Pursuant to Art. 2 clause 6 of the above-mentioned Act, articles of association and their amendments related to:

• mergers of capital companies,

• transformation of a capital company into another capital company,

• a contribution to a capital company, in return for its shares or stocks:

• enterprise of a capital company or its organized part,

On the other hand, Art. 9 sec. 11 of the Act deals with the civil law activities of companies that are exempt from tax, namely the articles of association and their amendments:

• related to the transformation or merger of companies in part of contributions to the company or share capital, the value of which was previously taxed with PCC or with the tax on capital contributions to capital companies in another EU country or on which, in accordance with the law of the EU country, the tax was not charged,

• related to an increase in the share capital covered by additional payments not returned to shareholders or shareholders, or from a non-refunded loan granted to a capital company by a partner or shareholder, which were previously taxed with PCC or with the tax on capital contributions to capital companies in another EU country,

• related to the increase of the share capital in the part concerning the value by which the share capital was decreased as a result of losses incurred by the capital company, provided that the increase of the share capital takes place within 4 years after its reduction,

• if the business of a capital company is the provision of public utility services in the scope of:

• public transport,

• management of ports and marinas,

• water, gas, electricity, thermal energy or collective sewage disposal

- however, it is necessary for the State Treasury or a local government unit to acquire at least 50% of the shares or stocks as a result of the amendment to the articles of association, or at the time of the amendment to the articles of association, such a part was already in their possession.

Importantly, exemption from PCC is available immediately by operation of law. It is not necessary to submit a PCC declaration to use it.

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Taking into account the EU law as a chance to recover the tax paid and PCC from the articles of association

From the time Poland became a member of the European Union, our law should comply with EU law. If this is not the case and there is a dispute, EU law will always be more important. This is also the case with PCC - namely, the Council Directive on indirect taxes on the raising of capital of February 12, 2008, 2008/7 / EC, Journal Journal of Laws L 46 of February 21, 2008 and its earlier version of July 17, 1969.

As mentioned in the previous paragraph, civil law transactions relating to joint-stock company contracts (Article 2 (6) of the PCC Act) are excluded from taxation on PCC - according to the Council Directives mentioned earlier, a joint-stock company (SKA) can also be considered a joint-stock company, despite that only a part of its capital and members meets the conditions set out in its regulations.

This position was also adopted by the Court of Justice of the EU in its judgment of 22 April 2015, file reference C-357/13. This judgment allows capital and joint-stock companies (S.K.A.) to apply for a refund of wrongly paid PCC by incorrectly recognizing it as a partnership, when in accordance with EU regulations it is a capital company and is exempt from taxation with tax on civil law transactions. In such a situation, the company may submit an application to the competent tax office for overpayment or apply for the reopening of tax proceedings on the paid tax on duty.

Limited partnerships and PCC against the articles of association - contradictory jurisprudence

A similar conflict between Polish and EU regulations applies to limited partnerships - according to Polish law, these are partnerships whose changes should be taxed with civil law transactions tax, and on the other hand, taking into account EU regulations - these are joint-stock companies whose amendments to partnership agreements are excluded from PCC.

Supreme Administrative Court in judgments:

• of December 16, 2014, file ref. II FSK 2893/12,

• of July 4, 2014, file ref. II FSK 1915/12,

adopted the position that despite the fact that, according to the Polish commercial law, a limited partnership is a partnership, it should be considered a capital company for the purposes of determining whether or not the obligation to tax PCC with the partnership agreement or its amendment, due to the aforementioned Council Directives of 1969 and 2008.

However, in the judgment of February 6, 2015, file ref. II FSK 87/13, the Supreme Administrative Court adopted the position that the cassation appeal lacks justified grounds for recognizing a limited partnership as a capital company, so it does not share doubts as to the compliance of the act on tax on civil law transactions with Directives 69/335 / EEC and 2008/7 / EC and did not grant the applicant company's request for a preliminary ruling to the Court of Justice of the European Union.

As you can see, the matter of recognizing limited partnerships as capital companies for the purposes of the PCC tax is still disputed in Poland, while in the case of joint-stock companies there are no doubts - contracts of joint-stock companies and their amendments are not subject to PCC tax - this is what the Court of Justice ruled. The EU and Polish tax offices cannot challenge this.