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Commentary of the Union of Entrepreneurs and Employers: Adoption of double taxation on limited partnerships is a breach of the solidarity pact with business and is unfair to entrepreneurs

Warsaw, 30th November 2020


Commentary of the Union of Entrepreneurs and Employers:
Adoption of double taxation on limited partnerships is a breach of the solidarity pact with business and is unfair to entrepreneurs


From the beginning of the legislative process, the Union of Entrepreneurs and Employers emphasised there were no rational arguments for the need to cover limited partnerships with CIT. The theses contained in the explanatory memorandum to the draft act turned out, one after another, to be false. Neither limited partnerships are used for purposes of tax optimisation (we stress once again that the Ministry of Finance itself admitted that the tax scheme using limited partnerships was only challenged six times basing on the anti-tax avoidance clause), nor has there been an unreasonable or detached from economic reality increase in recent years in their number. Furthermore, it is a generally accepted European practice not to cover these entities with CIT.

Nevertheless, the Ministry of Finance did not give up on this idea. As a result, the Sejm passed the double taxation of limited partnerships last Saturday, and the president signed the act that very same day, at night.

This is yet another levy that entrepreneurs (and at the end of the day – households and consumers) will have to pay from next year on. Recently, the sugar tax was adopted, and beginning on 1st January 2021, the collection of the trade tax will be resumed. The design of the latter is, incidentally, so flawed that within the electronics and household appliances industry, there will only be one significant Polish taxpayer.

We fail to comprehend the stubbornness with which the government has consistently been introducing new burdens during a crisis, the worst one in decades. The assumed revenues from them constitute a drop in the ocean to save the economy, and even in “normal” times, they would not be a factor determining the budget balance. All the more so, the potential fiscal result of these burdens today cannot be assessed otherwise than as insignificant.

Many entrepreneurs, contrary to economic calculation during a crisis, keep the jobs they created in the name of social solidarity. The imposition of new taxes on them at this time is generally perceived as unjust and unfair.

We see what is happening in Europe. The analysis we conducted a few weeks ago shows that a significant number of OECD countries had decided decides to reduce their tax burdens in the face of the crisis. Germany lowered VAT. The Swedes proposed a comprehensive reform package to stimulate the economic growth, including a reduction in PIT or a decrease in social security premiums. The Czechs lowered VAT for selected services some time ago, and decided recently to lower the PIT rate.

At the same time when an increasing number of European countries decided to reduce burdens and cut taxes, the Polish government not only was unconvinced of the – seemingly obvious – VAT reduction on food services, allowing this industry to survive this difficult period, but on the contrary, it was more concerned with designing new burdens. Moreover, the Minister of Finance has already announced (despite earlier declarations) that further burdens may be imposed next year.

We believe that the introduction of new taxes during the COVID-19 crisis will thwart economic recovery and slow down the return of growth. For some time, it seemed to be an argument understood by certain decisionmakers. The general consensus around this issue made it possible to hope that the issue of abstaining from new burdens would be one of the key axes of agreement between businesses, the labour market, and the government. Considering recent decisions and the incomprehensible determination to introduce new burdens, maintaining this unity in the face of the pandemic seems doubtful.


See: 30.11.2020 Commentary of the Union of Entrepreneurs and Employers: Adoption of double taxation on limited partnerships is a breach of the solidarity pact with business and is unfair to entrepreneurs


Fot. stevepb /

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