The implementation of Directive (EU) 2019/2121 closed a gap that had been impeding the mobility of companies: Polish law today regulates not only the cross-border merger but also the cross-border division and the cross-border conversion, within a single procedural scheme. That change is real. In tax it changed nothing. The certificate of the registry court confirms that the procedure complies with Polish law — it does not confirm that the operation is neutral, and it does not close off the questions of exit tax, residence and permanent establishment. Below we show where the boundary runs and what has to be settled before the application for the certificate.
Three transactions, one procedural scheme
Polish company law today knows three cross-border reorganisation procedures and conducts them according to a common pattern. Their basis is Article 491 § 1(1) and Article 516(1) et seq. of the Commercial Companies Code (Kodeks spółek handlowych, the CCC) for a merger, Article 528 § 1(1) and Article 550(2) et seq. of the CCC for a division, and Article 551 § 1(1) and Article 580(1) et seq. of the CCC for a conversion; the provisions cover the designated companies from the states of the European Union and the European Economic Area. They entered into force on 15 September 2023 by virtue of the Act of 16 August 2023 amending the Commercial Companies Code and certain other acts (Dz.U. z 2023 r. poz. 1705), which implemented Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019.
The scheme is the same in each case: a plan of the operation, a report of the management board for the shareholders and the employees, as a rule an examination of the plan by an expert appointed by the court, protection of shareholders and creditors, a resolution, a certificate of the registry court as to compliance with Polish law, and entry in the register of the destination state. The applicable law switches over at a single point: under Article 580(2) of the CCC, up to the day on which the certificate is received the conversion is governed by the law of the state of the registered office of the company being converted, and after that day by the law of the state of the registered office of the converted company. The provisions on mergers and divisions contain counterparts of that rule.
Two limitations are worth knowing before the variant is chosen. A cross-border division is permissible only by transferring the assets of the company being divided to a newly formed company or companies (Article 550(5) of the CCC); not every domestic model has a cross-border counterpart. A conversion, by contrast, preserves the legal identity of the company, as the practice of the authorities confirms in relation to a company registered in the National Court Register (Krajowy Rejestr Sądowy, the KRS) as a spółka z ograniczoną odpowiedzialnością (sp. z o.o.), the Polish limited liability company: "The Company will in fact merely transfer its registered office to another state and will be registered in the National Court Register as a sp. z o.o., which is not the same thing as commencing a new business activity" (translation by the author) (individual tax ruling of the Director of the National Revenue Information Service (Dyrektor Krajowej Informacji Skarbowej, the Director of the KIS) of 10 June 2025, no. 0111-KDIB2-1.4010.131.2025.1.AR). If what you are looking for is continuity of the entity, of its contracts and of its permits, the appropriate procedure is a conversion.
The court's certificate and the opinion of the Head of the KAS
The certificate is not a formality, and the route to it runs through the tax authority. The management board files with the registry court an application for a certificate as to the compliance of the transaction with Polish law, together with an application to the competent tax authority (Articles 516(12), 550(15) and 580(13) of the CCC). The court forwards the tax application and then carries out its own review, including from the point of view of abuse, infringement or circumvention of the law; Article 580(13) § 7 of the CCC establishes a presumption that no such circumstances exist where the operation leads to genuine management or genuine business activity in the destination state.
The scope of the opinion of the Head of the National Revenue Administration (Szef Krajowej Administracji Skarbowej, the Head of the KAS) is set by Article 119zzl of the Tax Ordinance (Ordynacja podatkowa): the authority assesses whether there is no reasonable presumption that the operation constitutes a transaction covered by the anti-avoidance clause, that it is subject to measures limiting treaty benefits, or that it constitutes an abuse of rights in VAT, and it confirms that the public law liabilities specified there have been satisfied or secured. The application must be accompanied by, among other things, a certificate containing the information required by Article 306e § 4 of the Tax Ordinance, a statement by the members of the management board as to immovable property situated in Poland, made subject to criminal liability, and proof of payment of the fee.
The calendar is of practical importance. The opinion is issued without undue delay, and no later than within one month of receipt of the application; in a particularly complex case the time limit may be extended by not more than 3 months (Article 119zzm of the Tax Ordinance); the fee amounts to 50% of the minimum wage in force on the day the application is filed and is payable within 7 days (Article 119zzo). The registry court deals with the application within 3 months, with the possibility of an extension by a further 3 months (Article 580(13) § 5 and § 9 of the CCC). Takeaway for practice: prepare the complete material for both sets of proceedings before the resolution. The opinion of the Head of the KAS replaces neither an individual tax ruling nor a protective opinion.
Employee participation — the second clock in the timetable
A cross-border reorganisation may trigger separate proceedings lasting several months. They are governed by the Act of 26 May 2023 on employee participation in a company arising from a cross-border conversion, merger or division of companies (ustawa z dnia 26 maja 2023 r. o uczestnictwie pracowników w spółce powstałej w wyniku transgranicznego przekształcenia, połączenia lub podziału spółek) (Dz.U. z 2023 r. poz. 1784), in force since 15 September 2023 (Article 60 of the Act). It concerns participation in the company's governing bodies, and not day-to-day information and consultation.
The mechanism consists in appointing a special negotiating body, which concludes with the company's governing body an agreement on the rules of participation; the members of that body are elected or appointed in each Member State in accordance with the law of that state (Article 4 of the Act). The obligation to appoint the negotiating body does not depend on the number of employees: Article 5 of the Act requires it to be appointed "immediately after the announcement by the competent governing body of the company" of the plan of the cross-border conversion, merger or division. Numerical thresholds appear only later, and they concern something else — Article 32(1) makes the application of the standard rules dependent on whether the forms of participation covered at least one third of the total number of employees of the merging companies. For the timetable the key provision is Article 24: the negotiations may last up to 180 days from the day on which the first meeting is convened, and the parties may jointly extend them to one year. A failure to reach agreement triggers the statutory standard rules (Articles 30–35 of the Act).
Takeaway: if forms of employee participation in the governing bodies exist in any of the participating companies, an additional period of anything from several to a dozen or more months has to be allowed for before the plan is announced. Information about the participation procedures forms part of the plan of the operation, and the employee documentation is an annex to the application for the certificate (Article 580(13) § 2 of the CCC).
Neutrality in CIT depends on the permanent establishment, not on the procedure
A properly conducted procedure under the Commercial Companies Code does not create tax neutrality. The EU background is Council Directive 2009/133/EC of 19 October 2009, which links neutrality not to the fact of a merger but to the transferred assets and liabilities remaining — as Article 4(2)(b) of the Directive provides — effectively connected with a permanent establishment of the receiving company situated in the Member State of the transferring company and playing a part in generating the profits or losses. Article 15(1)(a) of the Directive allows the benefits to be refused where the principal objective or one of the principal objectives of the operation is tax evasion or tax avoidance; the absence of valid commercial reasons may give rise to a presumption to that effect.
The Polish provisions reproduce that structure. The revenue of the acquiring company under Article 12(1)(8c) (art. 12 ust. 1 pkt 8c) of the Corporate Income Tax Act (ustawa o podatku dochodowym od osób prawnych, the CIT Act) is excluded under Article 12(4)(3e) only where, cumulatively: the assets have been taken up for tax purposes at the value resulting from the tax books of the acquired entity, and they have been allocated to business carried on within the territory of the Republic of Poland, including through a foreign permanent establishment. The mirror-image mechanism in Article 12(4)(3g) concerns assets allocated outside Poland. Article 12(1)(8d), (8f) and (8ba) and the conditions as to the entities involved in Article 12(15)–(16) are examined separately, and Article 12(13)–(14) switches off the preference where the main purpose or one of the main purposes of the operation is tax avoidance or tax evasion.
In an outbound structure the authority put it as follows: two conditions will be met, namely "(a) the acquiring company (the foreign company, in the case under discussion the Belgian Company) will take up those assets for tax purposes at the value resulting from the tax books of the Polish Company, and (b) the acquiring company (the Belgian Company) will allocate those assets to business carried on within the territory of the Republic of Poland through the Branch" (individual tax ruling of the Director of the KIS of 17 April 2025, no. 0114-KDIP2-1.4010.130.2025.2.DK). In the reverse configuration, where a Polish subsidiary acquires a foreign parent company, the analysis moves to the issue value: "in the case of the reverse merger in question, the value at which the shares or stock are taken up will be the value of the assets of the Acquired Company, which is to be read precisely as the issue value" (individual tax ruling of the Director of the KIS of 24 January 2025, no. 0111-KDIB1-1.4010.704.2024.2.SH).
Takeaway: before you fix the date of the entry in the register, establish to which business each material asset will be allocated and at what tax value the successor will take it up.
Exit tax — a separate event, a separate test
Exit tax does not follow from a merger; it follows from a transfer or from migration. Under Article 24f(2) of the CIT Act, tax is charged on the transfer of an asset outside the territory of the Republic of Poland as a result of which Poland loses, in whole or in part, the right to tax income from its disposal, the asset remaining the property of the same entity, and on a change of the taxpayer's tax residence; Article 24f(3) covers in particular a transfer to a foreign permanent establishment and a transfer of the business carried on by such an establishment. The rate is 19% of the tax base (Article 24f(1)), and the income is the excess of the market value of the asset over its tax value (Article 24f(5)) — not over its book value.
The exclusions are narrowly defined. Article 24g of the CIT Act excludes taxation on a temporary transfer of an asset for a period not exceeding 12 months in the situations described there. Article 24i allows an application to be made for payment to be spread into instalments over a period of not more than 5 years on a transfer to a state of the European Union or to a qualifying state of the European Economic Area; that is a decision of the authority, not an automatic deferral. The tax is payable by the 7th day of the month following the month in which the income arose (Article 24j). In CIT there is no monetary threshold.
In PIT the structure is similar, but the rates and thresholds differ: 19% where the tax value of the asset is determined, or 3% where under the applicable provisions that value is not determined (Article 30da(1)), subject to the conditions in Article 30da(2). Article 30da does not apply where the aggregate market value of the assets transferred does not exceed PLN 4,000,000 (Article 30db(1)). For personal assets, the scope is further limited by the list in Article 30da(3) and by the requirement of residence in Poland for a total of at least five years within the ten-year period preceding the change of residence.
Takeaway: carry out a separate Article 24f test for each material asset, with the date of the event. Transfers before the merger and after it are assessed independently.
A cross-border reorganisation — matters to settle before applying for the certificate
| Area | The question that decides it | Legal basis | Document |
|---|---|---|---|
| Type of transaction | Does the operation fall within one of the three cross-border procedures? | Article 491 § 1(1), 528 § 1(1), 551 § 1(1), 550(5) of the CCC | Resolution setting the direction, with a comparison of the variants |
| Applicable law | From what point does the law of the destination state apply? | Article 580(2) of the CCC and its counterparts | Memorandum covering both jurisdictions |
| Permanent establishment in Poland | Will the assets remain allocated to business carried on in the Republic of Poland? | Article 12(4)(3e)(b) and (3g), Article 4a(11) of the CIT Act; the tax treaty | Map of the assets with their allocation to the permanent establishment |
| Tax value | Will the successor take up the values from the predecessor's tax books? | Article 12(4)(3e)(a) of the CIT Act | Schedule of book, tax and market values |
| Purpose of the operation | Does the economic justification exist before the resolution? | Article 12(13)–(14) of the CIT Act; Article 15 of Directive 2009/133/EC; Article 119a of the Tax Ordinance | Dated economic justification |
| Exit tax | Is there a transfer of an asset, or a change of residence, involving a loss of the right to tax? | Article 24f(2)–(3), Articles 24g and 24i of the CIT Act; Articles 30da–30db of the PIT Act | Article 24f test together with a valuation |
| Residence and management | Where will the place of effective management be? | Article 3(1) and (1a) of the CIT Act; the tax treaty | Minutes and evidence of where the decisions are taken |
| Opinion of the Head of the KAS | Is the complete set of documents ready on the day the application is filed with the court? | Articles 119zzl–119zzp of the Tax Ordinance; Articles 516(12), 550(15), 580(13) of the CCC | Application for the opinion, the certificate under Article 306e § 4, the statement as to immovable property, proof of payment of the fee |
| Employee participation | Is the negotiation procedure triggered, and how long will it last? | Articles 4, 24 and 30–35 of the Act of 26 May 2023 | Timetable for the negotiating body and for the negotiations |
| Law of the destination state | What tax values will the authority there recognise on entry? | the law of the other state | Opinion of a local adviser |
The remaining risks that have to be closed off
A reorganisation that is neutral for CIT purposes may trigger other burdens. Tax residence does not depend on the entry in the register: Article 3(1) and (1a) of the CIT Act require the registered office or the management to be examined, including the actual way in which the company's affairs are conducted. If after the conversion strategic decisions continue to be taken in Poland, a conflict of residence or a permanent establishment may arise, and with it obligations in CIT, in VAT and on the part of the remitter.
Withholding tax calls for a fresh review after every change of owner, of financing or of intellectual property rights. The scope of the beneficial owner test is established for the particular payment and the particular preference; the directions of interpretation are set out in the tax explanatory notes of the Minister of Finance of 3 July 2025, Stosowanie tzw. klauzuli rzeczywistego właściciela dla celów podatku u źródła (Application of the so-called beneficial owner clause for withholding tax purposes). Check the CFC rules separately (Article 24a of the CIT Act, Article 30f of the Personal Income Tax Act (ustawa o podatku dochodowym od osób fizycznych, the PIT Act)) — a registered office in the European Union does not automatically switch those provisions off.
Cross-border MDR is assessed by reference to the date of the event; the regime arising from the Act of 29 May 2026 amending the Tax Ordinance and certain other acts (Dz.U. z 2026 r. poz. 846) applies from 1 October 2026, which, for operations falling between the two regimes, calls for the transactions to be dated precisely. Transfer pricing comes into play wherever functions, assets or risks are transferred; restructuring remuneration and the exit fee are a separate matter from exit tax (Articles 11a–11t of the CIT Act).
Foreign law — what a Polish analysis will not settle
This material describes the Polish side only and does not replace the opinion of an adviser from the jurisdiction of the other state. That is not a courtesy reservation. A Polish adviser will assess the compliance of the operation with the Commercial Companies Code and its consequences in Polish taxes, but will not determine whether the foreign register will accept a given legal form, what tax value of the assets the authority there will recognise on entry, whether an exit charge of its own will arise in the state of departure, and how the succession of rights under contracts and permits will be classified.
We recommend a two-track approach: one joint memorandum, two teams each answering for its own jurisdiction, one list of divergences. Settle the contradictions before the resolution — afterwards, the cost of changing the variant rises sharply.
The most common mistake
The most common mistake concerns not the substantive taxes but the calendar. The management board adopts a date for the entry in the destination register — usually the beginning of a financial year, or a date agreed with an investor or a bank — and builds the corporate timetable backwards from it, leaving out two sets of proceedings that run to a rhythm of their own.
The first is the opinion of the Head of the KAS: one month from receipt of the application, extendable by not more than 3 months (Article 119zzm of the Tax Ordinance), with the time limit running from a complete application, so that every request to supplement it moves the starting point. To that must be added the registry court's three-month time limit, extendable by a further 3 months (Article 580(13) § 5 and § 9 of the CCC). The second is employee participation: up to 180 days of negotiations, with the possibility of extension to one year (Article 24 of the Act of 26 May 2023).
The consequence is always much the same: the date of the entry moves by several months, and with it everything pinned to that date comes apart — the tax year and the moment the books are closed, the valuation assumptions in the plan of the operation, change of control clauses, the closing dates declared to the investor. How to avoid this: calculate the date of the entry backwards, taking the full statutory time limits of both sets of proceedings together with the extensions; assemble the annexes to the application for the opinion before the resolution; establish the employee participation position at the stage of analysing the variants; and treat the date of the entry as a target, not as an undertaking towards third parties.
Summary
- Establish at the outset which of the three procedures matches the intention — a cross-border division is permissible only in favour of newly formed companies (Article 550(5) of the CCC), and a conversion preserves the identity of the company.
- Prepare a map of the assets with their book, tax and market values and with their allocation to business in Poland or outside it; it is that map, and not the Commercial Companies Code procedure, that determines whether Article 12(4)(3e) and (3g) of the CIT Act apply.
- Carry out a separate test under Article 24f of the CIT Act (and, as the case may be, Articles 30da and 30db of the PIT Act) for each material asset and each date of an event; do not equate exit tax with the consequences of the merger itself or with restructuring remuneration.
- Build the timetable from the statutory time limits for the opinion of the Head of the KAS, for the registry court's review and for any employee negotiations — including the extensions — and only then derive the date of the entry from them.
- Obtain the opinion of an adviser from the other state before the resolution and set both analyses side by side in a single list of divergences; in parallel, close off residence, permanent establishment, withholding tax, CFC, MDR and transfer pricing.
Sources cited
All quotations from Polish-language sources — statutes, tax rulings and court judgments — are given here in the author's translation; the Polish wording is authoritative.
- Individual tax ruling of the Director of the National Revenue Information Service of 17 April 2025, no. 0114-KDIP2-1.4010.130.2025.2.DK — cross-border merger of a Polish company with a foreign acquiring company; the conditions in Article 12(4)(3e) of the CIT Act where the assets are allocated to a branch in Poland. https://eureka.mf.gov.pl/informacje/podglad/636386
- Individual tax ruling of the Director of the National Revenue Information Service of 24 January 2025, no. 0111-KDIB1-1.4010.704.2024.2.SH — cross-border reverse merger: acquisition of a Cypriot company by its Polish subsidiary; determination of the issue value and the absence of revenue under Article 12(1)(8c), (8d) and (8f) of the CIT Act. https://eureka.mf.gov.pl/informacje/podglad/624031
- Individual tax ruling of the Director of the National Revenue Information Service of 10 June 2025, no. 0111-KDIB2-1.4010.131.2025.1.AR — cross-border conversion of a Cypriot company into a Polish sp. z o.o.; the tax year after the conversion, the opening of the books and the change of tax residence. https://eureka.mf.gov.pl/informacje/podglad/643497
- Tax explanatory notes of the Minister of Finance of 3 July 2025, Stosowanie tzw. klauzuli rzeczywistego właściciela dla celów podatku u źródła (Application of the so-called beneficial owner clause for withholding tax purposes). https://www.gov.pl/web/finanse/objasnienia-podatkowe-z-3-lipca-2025-r-stosowanie-tzw-klauzuli-rzeczywistego-wlasciciela-dla-celow-podatku-u-zrodla
- Council Directive 2009/133/EC — the wording of Article 4(2)(b) and Article 15(1)(a) verified in EUR-Lex. https://eur-lex.europa.eu/legal-content/PL/TXT/HTML/?uri=CELEX:32009L0133
- Act of 26 May 2023 on employee participation in a company arising from a cross-border conversion, merger or division of companies (Dz.U. z 2023 r. poz. 1784) — read in the official text: Article 4 (election of the members of the negotiating body), Article 5 (appointment of the negotiating body immediately after the announcement of the plan), Article 24 (180 days, with the possibility of extension to one year), Articles 30–35 (the standard rules), Article 32(1) (the threshold of one third of the number of employees for the application of the standard rules) and Article 60 (entry into force on 15 September 2023). The Act contains no numerical employment threshold conditioning the very commencement of negotiations — the obligation to appoint the negotiating body is tied to the event of the announcement of the plan, and not to the number of persons employed.
E-book references
Selected restructuring topics are discussed at greater length in the e-book series Biblioteka Restrukturyzacji (Restructuring Library; Zbyszko Pora, JTWPOLAND): converting a sole trader into a sp. z o.o., the division of a company by spin-off or by separation, and the test for an organised part of an enterprise. The PDF files are available free of charge in the e-book section; the series is currently published in Polish.
Why we do this
As a tax advisor I take care of the substantive quality of our free materials. My aim is to educate the market through reliable analyses that allow entrepreneurs to apply the law safely in practice.
Get in touch →Legal basis: Act of 15 September 2000 — Commercial Companies Code (Dz.U. z 2024 r. poz. 18, as amended), in particular Article 491 § 1(1), Article 493 § 2, Articles 516(1)–516(12), Article 528 § 1(1), Articles 550(2)–550(15), Article 551 § 1(1), Articles 580(1)–580(13); Act of 16 August 2023 amending the Commercial Companies Code and certain other acts (Dz.U. z 2023 r. poz. 1705); Act of 29 August 1997 — Tax Ordinance (Dz.U. z 2026 r. poz. 622, as amended), in particular Articles 93–93e, Article 119a, Articles 119zzl–119zzp, Article 306e § 4; Act of 15 February 1992 on corporate income tax (Dz.U. z 2026 r. poz. 554, as amended), in particular Article 3(1) and (1a), Article 4a(11) and (16a), Articles 11a–11t, Article 12(1)(8ba), (8c), (8d) and (8f), Article 12(4)(3e)–(3g) and (12), Article 12(13)–(16), Article 21, Article 22, Article 24a, Articles 24f–24j, Article 26; Act of 26 July 1991 on personal income tax (Dz.U. z 2026 r. poz. 592, as amended), in particular Article 30da, Article 30db, Article 30dh, Article 30f; Act of 26 May 2023 on employee participation in a company arising from a cross-border conversion, merger or division of companies (Dz.U. z 2023 r. poz. 1784), in particular Article 1, Article 4, Article 24, Articles 30–35, Article 60; Act of 29 May 2026 amending the Tax Ordinance and certain other acts (Dz.U. z 2026 r. poz. 846) — the MDR regime from 1 October 2026; Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions (Dz.Urz. UE L 321 z 12.12.2019, s. 1); Council Directive 2009/133/EC of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States (Dz.Urz. UE L 310 z 25.11.2009, s. 34), in particular Articles 4 and 15