Poland: Summaries of recent Supreme Administrative Court decisions
Character of profits of converted sole proprietorship; taxation of prizes granted to athletes; deductibility of expenses incurred by parent in support of subsidiary
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October 17, 2024
The KPMG member firm in Poland prepared a report that includes summaries of the following decisions of the Supreme Administrative Court.
- The court on October 10, 2024, held (case file II FSK 722/24) that undistributed profits of an entrepreneur operating a sole proprietorship retain their character as previously taxed profits after the business is converted into a z o. o. company (Polish private limited company).
- The court on October 10, 2024, held (case file FSK II 92/22) that prizes granted to athletes as part of business activity they conduct constitutes business income and not income from “other sources” taxed at a flat rate.
- The court on October 9, 2024, held (case file FSK II 45/22) that expenses incurred by a parent company that serve its subsidiary cannot be considered its own tax-deductible costs under Article 15(1) of the CIT Act. The notion that the parent company may increase its profit from selling shares in the subsidiary is merely an indirect connection and insufficient to support deductibility by the parent.
Read an October 2024 report prepared by the KPMG member firm in Poland