Today, we will discuss taxation for Polish businesses. Taxes in Poland is an important topic, and we have already written an article on this. There is an opportunity to optimize taxation in Poland and pay less within the legal framework. One of the main ways is through alternative forms of conducting business. Let’s take a closer look at a limited partnership (spółka komandytowa), its risks, advantages, and disadvantages, and how it can be used to optimize company income and expenses.
We offer you to read the article or watch the video below.
Double Taxation in Poland
The primary form of business activity in Poland is Spółka z o.o. (Limited Liability Company), which is subject to double taxation — the entrepreneur pays a 9% or 19% corporate income tax (CIT) and an additional 19% tax when distributing funds to the board members.
A spółka komandytowa allows you to avoid double taxation in Poland and pay tax only once. The company is exempt from corporate tax and pays tax for individuals in Poland.
Below, we will discuss what is needed to open a limited partnership in Poland, its nuances, pros, and cons. These should be known and understood in advance.
There are three laws regulating the activities of spółka komandytowa:
- The Commercial Companies Code, adopted on September 15, 2000
- The Civil Code
- The Freedom of Economic Activity Act
You can read more about spółka komandytowa on official sources.
Nuances and Risks of Opening a Spółka Komandytowa
A limited partnership in Poland is not considered a full legal entity, but it has similar rights. It can be a VAT payer, hire and fire employees.
A spółka komandytowa is registered through a notary, and at least two entities are required to establish it, unlike a spółka z o.o., which can have just one founder. In a limited partnership, you need managing partners or “komplementariusz” (general partners) — individuals or legal entities responsible for the company’s operations, including with their personal assets. The second entity is the investor (“komandytysta”), who is only at risk for the capital they invested. The investor is not part of the managing body. They may manage the company with a special authorization — to be a proxy in their own company.
For more details on conducting business in Poland, read this article.
A limited partnership in Poland is suitable when a person or group of people have a business idea or process, and on the other hand, there is an investor willing to invest funds for future dividends.
Here’s a life hack. To avoid the personal liability of the general partner, you can be the founder of a spółka komandytowa while being a board member in a spółka z o.o. As a result, the “komplementariusz” can be a legal entity, and the risk is limited only to the framework of this company, which is 5,000 PLN.
Advantages of a Spółka Komandytowa in Poland
- The ability to have different capital, responsibility, shares, and to distribute profits in various ways (this is also possible in a spółka z o.o., but much more complicated)
- It is not a CIT payer at 9% or 19%. Most of the time, people create a limited partnership for this reason
- No minimum statutory capital required
Disadvantages of a Spółka Komandytowa
- All participants pay ZUS (social security fund) and personal income tax (PIT)
- It makes sense to create this type of business if the entrepreneur plans to withdraw 50-100 thousand PLN per year for themselves and their partners. Otherwise, it may be unprofitable because you have to pay ZUS 300 EUR for each participant.
- Overall, this is an excellent option for optimizing taxes in Poland, used by Poles themselves, but this form of business is not suitable for small or micro businesses. It is more suited to medium-sized businesses. We have a separate article about business in Poland; read it to learn more about managing a Polish business.
If you plan to enter the Polish market or scale an existing business, contact us, and our team will help you with this.
