Voivodeship Administrative Court in Warsaw, III SA/Wa 2935/22

Ruling: The continuous share ownership criterion may as well be met before the provisions on a holding company came into force, as there is no other indication in the intertemporal provisions of the CIT Act amendment.

Explanation: In 2022 an institution of a “holding company” was introduced in the Act on Corporate Income Tax. Such companies are free from the 19% capital gains tax on dividends. One of the criteria to obtain such status is that of possessing at least 10% of shares in an affiliate for two years. A company meeting this requirement received an interpretation from the tax authorities, that the time criterion must be calculated from January 1^st 2022, as it was the day when the CIT Act amendment came into force. Having disagreed with this position, the taxpayer appealed to the Voivodeship Administrative Court in Warsaw.

The Court repealed the questioned interpretation, arguing that it is impossible to state, that since the provisions on holding companies entered into force on January 1^st 2022, that moment must be considered as commencing the running of the period indicated in the provisions of the Act on Corporate Income Tax. It should be pointed out that in the amending act, which added to the Act chapter 5b entitled “Taxation of holding companies”, no reservation was indicated with respect to the as to the date from which the lapse of the period of holding shares by a holding company is to be calculated.

Impact: As a result of this verdict companies meeting the requirements provided by the CIT Act may take advantage of the holding company status already for the year 2022. This inevitably shall lead to savings on taxation on dividends and shall grant an opportunity to request returning tax overpayments.