The question "is this merger neutral for CIT" is the wrong question. The statute knows no single rule of neutrality. It knows several separate heads of revenue — Article 12(1)(8ba), (8c), (8d) and (8f) (art. 12 ust. 1 pkt 8ba, 8c, 8d i 8f) of the Corporate Income Tax Act (ustawa o podatku dochodowym od osób prawnych, the CIT Act) — and for each of them a separate exclusion, hedged by its own condition. If you are planning to acquire a subsidiary, a sister company or a parent company, you have to work through that list item by item, for each entity separately — and gather the evidence before the registry court makes the entry.
The Commercial Companies Code route: what the procedure settles and what it does not
Proposition. Carrying out the corporate procedure correctly is a condition of the merger taking effect, but it does not determine its tax consequences.
Statutory basis. A merger by acquisition consists in the transfer of all the assets of the acquired company to the acquiring company in exchange for shares or stock allotted to the shareholders of the acquired company (Article 492 § 1(1) (art. 492 § 1 pkt 1) of the Commercial Companies Code (Kodeks spółek handlowych, the CCC)). On the merger date — the date of entry in the register competent for the acquiring company's registered office — the acquired company is struck from the register (Article 493 § 1–2 of the CCC) and the acquiring company succeeds to all its rights and obligations (Article 494 § 1 of the CCC). Tax succession is added by Article 93 of the Tax Ordinance (Ordynacja podatkowa).
Practice. The documentary path is always the same: written agreement of the merger plan with its annexes (Articles 498 and 499 § 2 of the CCC); making the plan available, as a rule, one month before the meeting (Article 500 of the CCC); the management boards' report; examination of the plan by an auditor; two notifications to the shareholders (Articles 504–505 of the CCC); resolutions recorded in a notarial minute (Article 506 of the CCC); filing and registration. There are two departures from the auditor's examination. The consent of all the shareholders allows the management board's report, the duty to report material changes and the examination of the plan to be dispensed with, to the extent set out in Article 503¹ § 1 of the CCC; where the acquiring company is a joint-stock company, Article 503¹ § 2 of the CCC applies in addition. On the acquisition of a single-member company the simplifications in Article 516 § 6 of the CCC apply, and Article 514 § 1 of the CCC prohibits taking up own shares in exchange for shares held in the acquired company — which is why no issue of shares takes place in that case.
Takeaway. The consent of all the shareholders shortens the procedure, but it changes none of the tax tests and does not replace the analysis described in our article on tax neutrality in restructurings. Build the tax timetable around the date of entry in the KRS register.
The acquiring company: Article 12(1)(8c) and the exclusion in Article 12(4)(3e)
Proposition. The excess of the market value of the acquired assets over their tax value is revenue; it ceases to be revenue only where the acquiring company satisfies both conditions in Article 12(4)(3e) (art. 12 ust. 4 pkt 3e) of the CIT Act.
Statutory basis. Article 12(1)(8c) (art. 12 ust. 1 pkt 8c) of the CIT Act sets the revenue as at the day preceding the merger date. The exclusion in Article 12(4)(3e) of the CIT Act requires the acquiring company to take up the assets for tax purposes at the value resulting from the tax books of the acquired entity and to allocate them to business carried on within the territory of the Republic of Poland, including through a foreign permanent establishment.
Practice. In an individual tax ruling of the Director of the National Revenue Information Service (Dyrektor Krajowej Informacji Skarbowej, the Director of the KIS) of 2 June 2025, no. 0111-KDIB1-1.4010.141.2025.2.MF, the authority framed this as a two-part test: "revenue does not include any excess of the market value of the assets of the acquired entity over the value of those assets taken for tax purposes, if two conditions are met" (translation by the author). The same mechanism was confirmed by the ruling of 11 June 2025, no. 0111-KDWB.4010.12.2025.2.KP. In both cases the authority stressed that the excess as such gives rise to revenue as a rule, and that only the exclusion removes it. How the Director of the KIS reads the "market value of the assets" also matters: in a ruling of 2 April 2025, no. 0111-KDIB1-1.4010.74.2025.2.SH, he stated that "[p]rovisions and write-downs likewise cannot form part of that calculation for the purpose of determining the income arising from the restructuring".
Takeaway. Prepare a record of tax values as at the day preceding the merger date, reconciled to the register of fixed assets and intangible assets. Document the allocation of the assets to business in Poland separately — it is a free-standing condition, not a consequence of the first one.
Where the acquiring company is a shareholder in the acquired company: points (8d), (8f) and issue value
Proposition. Which revenue provision applies on the acquiring company's side depends on the size of its holding in the share capital of the acquired company.
Statutory basis. Article 12(1)(8d) of the CIT Act covers the excess of the market value of the assets over the issue value of the shares allotted to the shareholders of the merging companies. Article 12(1)(8f) of the CIT Act covers — in the part corresponding to the acquiring company's holding — the excess over the acquisition price of the shares in the acquired entity; it is switched off by Article 12(4)(3f) of the CIT Act where the holding is not less than 10%. Issue value is the subscription price set in the articles of association or the statutes, not lower than the market value of the shares (Article 4a(16a) of the CIT Act); it is not the nominal value.
Practice. In the ruling of 11 June 2025, no. 0111-KDWB.4010.12.2025.2.KP, the Director of the KIS explained how the two provisions relate to each other: "Article 12(1)(8d) and Article 12(1)(8f) of that Act are complementary. If the acquiring company holds no shares (stock) in the acquired company, only Article 12(1)(8d) applies. If it holds 100% of the shares (stock), only Article 12(1)(8f) applies".
Takeaway. Before you calculate anything, establish the ownership structure as at the day preceding the merger. On the acquisition of a wholly owned subsidiary what counts is the acquisition price of its shares, not the exchange ratio; between sister companies with an issue of shares, the reverse is true.
The shareholder of the acquired company: Article 12(1)(8ba) and Article 12(4)(12)
Proposition. Deferral at the shareholder level depends on the history of his shares and on the carry-over of their tax value, not on whether the companies met the conditions on their own side.
Statutory basis. The shareholder's revenue is the issue value of the shares allotted to him by the acquiring company (Article 12(1)(8ba) of the CIT Act). Article 12(4)(12) of the CIT Act excludes that revenue where, cumulatively: the shares in the acquired entity were not acquired or taken up as a result of an exchange of shares, or allotted as a result of another merger or division; and the value of the new shares taken by the shareholder for tax purposes is no higher than the value that would have been taken had the merger not taken place. The statute places the burden of proof expressly on the shareholder (Article 12(12b) of the CIT Act). For a natural person the starting point is Article 24(5)(7a) (art. 24 ust. 5 pkt 7a) of the Personal Income Tax Act (ustawa o podatku dochodowym od osób fizycznych, the PIT Act), and the deferral follows from Article 24(8) in conjunction with Article 24(8da) and (8db) of that Act; a cash payment is accounted for separately (Article 24(5)(6) of the PIT Act).
Practice. In the ruling of 2 April 2025, no. 0111-KDIB1-1.4010.74.2025.2.SH, the authority applied the exclusion only after tracing the history of the shares back to 2000, including an earlier merger in 2006. It noted at the same time that the applicant's statement about the origin of the shares "was accepted as an element of the future event that is not subject to assessment", because "[i]t is for the taxpayer to prove (…) the facts from which he derives legal consequences favourable to himself".
Takeaway. Prepare a share history record for each shareholder: the date and manner of acquisition, the tax cost, any earlier reorganisations. An individual tax ruling is no substitute for that evidence — it protects only where the facts match the description.
Who recognises revenue on a merger by acquisition, when and on what basis
| Entity | Revenue provision | Exclusion provision | Condition that has to be established |
|---|---|---|---|
| Acquiring company — assets acquired | Article 12(1)(8c) of the CIT Act | Article 12(4)(3e) of the CIT Act | the assets taken up at the value from the acquired company's tax books, and allocated to business in Poland |
| Acquiring company holding no shares in the acquired company | Article 12(1)(8d) of the CIT Act | no separate exclusion; a statutory exception for the route in Article 515¹ § 1 of the CCC | issue value of the shares allotted to the shareholders no lower than the market value of the acquired assets |
| Acquiring company holding shares in the acquired company | Article 12(1)(8f) of the CIT Act | Article 12(4)(3f) of the CIT Act | a holding in the acquired company's share capital of not less than 10% on the last day before the merger |
| Shareholder of the acquired company (CIT) | Article 12(1)(8ba) of the CIT Act | Article 12(4)(12) of the CIT Act | shares not acquired in an exchange of shares or in an earlier merger/division, and carry-over of their tax value (burden of proof — Article 12(12b) of the CIT Act) |
| Shareholder of the acquired company (PIT) | Article 24(5)(7a) of the PIT Act | Article 24(8) in conjunction with Article 24(8da) and (8db) of the PIT Act | the conditions as to the entities involved, the history of the shares and the carry-over of value; no circumstances within Article 24(19)–(20) of the PIT Act |
| Each of the above | — | Article 12(13)–(14) of the CIT Act (specific anti-avoidance clause) | valid economic reasons, and tax avoidance or tax evasion not being the main purpose or one of the main purposes |
The specific anti-avoidance clause in Article 12(13)–(14) of the CIT Act
Proposition. The specific anti-avoidance clause creates no new head of revenue — it withdraws the right to exclusions whose conditions have already been met.
Statutory basis. Article 12(13) of the CIT Act switches off, among others, Article 12(4)(3e)–(3h) and (12) where the main purpose or one of the main purposes of the merger is tax avoidance or tax evasion. Article 12(14) of the CIT Act establishes a presumption of such a purpose where the merger was not carried out for valid economic reasons.
Practice. Interpreting the counterpart of that condition in the directive on the common system of taxation applicable to mergers, the Court of Justice of the European Union held, in its judgment of 10 November 2011 in Case C-126/10 Foggia, ECLI:EU:C:2011:718, that "a saving in costs resulting from the reduction of administrative and management costs is inherent in any merger by acquisition" (paragraph 48), and that a commercial reason is not made out where "the savings which the group would make in structural costs are entirely marginal" when set against the tax advantage (paragraph 47).
Takeaway. "Simplifying the structure" is not a justification; it is the heading of one. In our view the economic justification should be expressed in numbers: how many processes will be combined, by how much corporate administration costs will fall, how financing will change. Prepare the document before the resolutions; we describe how to build it in our article on the economic justification for a restructuring.
Tax losses after the merger
Proposition. Succession under the Tax Ordinance does not carry losses across, and the acquiring company's own losses may cease to be available.
Statutory basis. Article 7(3)(4) and Article 7(4) of the CIT Act prevent the losses of acquired businesses from being taken into account; the exception for the conversion of one company into another company does not extend to a merger. Article 7(3)(7) of the CIT Act restricts the use of the acquiring company's own losses where, as a result of the acquisition, its actual core business has become wholly or partly different, or where at least 25% of the shares are held by entities that did not hold those rights on the last day of the tax year in which the loss was incurred.
Takeaway. The conditions in Article 7(3)(7) of the CIT Act are alternatives — one of them is enough. Check the direction of the merger (which company acquires which) before you take the decision, not after the plan has been signed.
Reverse mergers and the absence of a share capital increase
Proposition. The absence of a share capital increase does not mean that no shares were allotted to the shareholder, or that their issue value need not be determined.
Statutory basis. In a reverse merger the subsidiary acquires the parent company and, as part of the assets acquired, takes up its own shares, which it then issues to the shareholders of the acquired company (Article 515 § 1 of the CCC). Article 12(1)(8c), (8d) and (8ba) of the CIT Act apply, together with the corresponding exclusions. The route under Article 515¹ § 1 of the CCC is a separate configuration, for which the statute provides a separate exception in relation to Article 12(1)(8d) of the CIT Act.
Practice. The dispute is whether one can speak of an issue value at all where no new shares are issued. In a ruling of 27 August 2025, no. 0111-KDIB1-1.4010.340.2025.2.AND, the Director of the KIS held that one can: "in a reverse merger the parties to the transaction should likewise determine a 'market valuation', despite the absence of any actual issue of new shares (stock). Accordingly, in the case of the reverse merger in question, the value at which the shares (stock) are taken up will be the value of the assets of the acquired company, and this is precisely what is to be read as the issue value". The authority added that, since the acquiring company will issue its own shares to the shareholder, on the shareholder's side "taxable revenue will, as a rule, arise under Article 12(1)(8ba) of the CIT Act" — which is then removed by Article 12(4)(12) of the CIT Act. In a ruling of 24 March 2025, no. 0114-KDIP2-1.4010.34.2025.2.JF, concerning the same configuration, the authority held the position to be correct and dispensed with the legal reasoning for its assessment.
Takeaway. In a reverse merger the merger plan must contain the exchange ratio and a valuation of the assets, even though the share capital does not change. Without that valuation you cannot show that the market value of the acquired assets does not exceed the issue value of the own shares issued. We discuss the scope of the rights and obligations passing to the acquiring company in our article on tax succession in reorganisations.
PCC and VAT on a merger
Proposition. A merger of capital companies falls outside PCC, and the transfer of an enterprise or of an organised part of it falls outside the scope of the VAT Act — but both exclusions have limits.
Statutory basis and takeaway. Articles of association and amendments to them connected with a merger of capital companies are not subject to PCC under Article 2(6)(a) (art. 2 pkt 6 lit. a) of the Tax on Civil Law Transactions Act (ustawa o podatku od czynności cywilnoprawnych, the PCC Act); the exclusion also covers a capital increase forming part of such a merger, whereas configurations involving a partnership, and transactions separate from the merger, call for separate classification. For VAT, the transfer of an enterprise or of an organised part of an enterprise (ZCP) falls outside the VAT Act (ustawa o podatku od towarów i usług) under Article 6(1) (art. 6 pkt 1) of that Act — this is an exclusion of the Act's application, not an exemption — and the obligation to adjust input tax passes to the acquirer under Article 91(9) of the VAT Act. Where the acquired company no longer carries on business and holds only individual assets, the classification of the subject of the transfer has to be carried out afresh.
The most common mistake
The most common mistake is to treat the carry-over of tax values as a technical exercise for the accounting team to complete after the merger date — "we will move the balances once we have the data". In fact Article 12(4)(3e) of the CIT Act lays down a substantive condition: the acquiring company is to take up the assets at the value resulting from the tax books of the acquired company. The effect arises as at the day preceding the merger date, and it has to be established with evidence from that period.
If the acquired company kept no separate record of tax values, or if after the merger the assets were recognised at the fair values produced by purchase accounting and tax depreciation was run on the same basis, the condition is met only in part — and the exclusion ceases to operate to the same extent.
How to avoid this: before the resolutions are passed, draw up a table of the assets being acquired with three columns — accounting value, tax value, planned initial value at the acquiring company — and reconcile it to the acquired company's last CIT return. Describe separately which business carried on in Poland the assets will be allocated to, and record that the accounting method chosen does not change the tax values.
Summary
- Run four separate calculations: Article 12(1)(8c), (8d), (8f) and (8ba) of the CIT Act, each as at the day preceding the merger date, and apply the matching exclusion to each.
- Establish the ownership structure before the merger — it determines whether Article 12(1)(8d) or point (8f) applies, and whether shares are issued at all.
- Gather the evidence of the carry-over of tax values and of the allocation of the assets to business in Poland before the date of entry in the KRS register, not after it.
- Prepare a share history for every shareholder; the burden of proving the conditions in Article 12(4)(12) of the CIT Act rests on the shareholder (Article 12(12b) of the CIT Act).
- Check the losses in both companies separately — Article 7(3)(4) and Article 7(4) of the CIT Act for the acquired company, Article 7(3)(7) for the acquiring company's own losses — before you choose the direction of the merger.
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 11 June 2025, no. 0111-KDWB.4010.12.2025.2.KP — the complementary nature of Article 12(1)(8d) and (8f) of the CIT Act; the exclusions in Article 12(4)(3e) and (3f). https://eureka.mf.gov.pl/informacje/podglad/643735
- Individual tax ruling of the Director of the National Revenue Information Service of 2 June 2025, no. 0111-KDIB1-1.4010.141.2025.2.MF — the two conditions for the exclusion in Article 12(4)(3e) of the CIT Act; Article 12(4)(3f) where the holding is 100%. https://eureka.mf.gov.pl/informacje/podglad/642518
- Individual tax ruling of the Director of the National Revenue Information Service of 2 April 2025, no. 0111-KDIB1-1.4010.74.2025.2.SH — the meaning of "market value of the assets"; Article 12(4)(12) of the CIT Act at the shareholder level; burden of proof. Date of issue per the document metadata: 2 April 2025; date of publication: 11 April 2025. https://eureka.mf.gov.pl/informacje/podglad/633563
- Individual tax ruling of the Director of the National Revenue Information Service of 27 August 2025, no. 0111-KDIB1-1.4010.340.2025.2.AND — issue value in a reverse merger without a share capital increase; the issue of own shares and Article 12(1)(8ba) of the CIT Act. https://eureka.mf.gov.pl/informacje/podglad/655651
- Individual tax ruling of the Director of the National Revenue Information Service of 24 March 2025, no. 0114-KDIP2-1.4010.34.2025.2.JF — reverse merger without a share capital increase; the authority held the position to be correct and dispensed with the legal reasoning for its assessment, so the ruling contains no reasoning of its own. https://eureka.mf.gov.pl/informacje/podglad/632474
- Judgment of the Court of Justice of the European Union of 10 November 2011 in Case C-126/10 Foggia — Sociedade Gestora de Participações Sociais SA v Secretário de Estado dos Assuntos Fiscais, ECLI:EU:C:2011:718 — paragraphs 47–48, on valid commercial reasons. https://eur-lex.europa.eu/legal-content/PL/TXT/?uri=CELEX:62010CJ0126
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.
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Get in touch →Legal basis: Act of 15 September 2000 — Commercial Companies Code (consolidated text: Dz.U. z 2024 r. poz. 18, as amended) — Articles 491–494, 498–508, 514, 515, 515¹ and 516.; Act of 15 February 1992 on corporate income tax (consolidated text: Dz.U. z 2026 r. poz. 554, as amended) — Article 4a(16a); Article 7(3)(4) and (7) and Article 7(4); Article 12(1)(8ba), (8c), (8d) and (8f); Article 12(4)(3e), (3f) and (12); Article 12(12b) and Article 12(13)–(16); Article 26(1).; Act of 26 July 1991 on personal income tax (consolidated text: Dz.U. z 2026 r. poz. 592, as amended) — Article 24(5)(6) and (7a), Article 24(8), Article 24(8da) and (8db), Article 24(19)–(20).; Act of 11 March 2004 on the tax on goods and services (consolidated text: Dz.U. z 2025 r. poz. 775, as amended) — Article 2(27e), Article 6(1), Article 91(9).; Act of 9 September 2000 on the tax on civil law transactions (consolidated text: Dz.U. z 2026 r. poz. 191) — Article 1(1)–(3), Article 2(6)(a).; Act of 29 August 1997 — Tax Ordinance (consolidated text: Dz.U. z 2026 r. poz. 622, as amended) — Article 93, Articles 93d–93e, Articles 14k–14m and 14na, Articles 119a and 119c.; Act of 29 September 1994 on accounting (consolidated text: Dz.U. z 2026 r. poz. 522, as amended) — Article 12, Articles 44a–44c, Article 64(3).; Council Directive 2009/133/EC of 19 October 2009 (Dz.Urz. UE L 310 z 25.11.2009, s. 34).