capital markets

Elimination of income tax exemption for closed-end investment funds

On the last day of October a notice was published on the Sejm website on filing of a parliamentarian’s bill to amend the Personal Income Tax Act and the Corporate Income Tax Act. The changes to the CIT Act, to enter into force on 1 January 2017, would eliminate the exemption from corporate income tax for closed-end investment funds (FIZ). This exemption has been used as a major instrument for tax optimisation, for example for entities involved in trading of debt and real property, and for taxpayers seeking protection against rules governing controlled foreign corporations (CFC).

New system of penalties and administrative sanctions for violation of Public Offering Act now before the Parliament

The bill would significantly raise the sanctions for violation of reporting obligations—to PLN 40 million or 5% of annual turnover. The Polish Financial Supervision Authority could also publish the names of persons violating the act.

Consideration of customer complaints by financial institutions

Financial services are not always performed as they should be, and procedures for considering customer complaints have not always been effective. Consequently, in May 2015 the Polish Financial Supervision Authority adopted a resolution on consideration of customer complaints, and in August the Sejm adopted the Act on Consideration of Complaints by Financial Market Entities and on the Financial Ombudsman. The act has just entered into force.

Shareholder’s proxy at the general meeting of a public company

The season for annual general meetings is approaching with the deadline for approval of the financial statements of Polish companies. Shareholders need not participate in the meeting personally, but may appoint a proxy. However, the law provides for certain differences in appointment of proxies in listed and unlisted companies.

New Bond Act

The Bond Act of 15 January 2015 will enter into force on 1 July 2015. Although it is a new law, for the most part it carries forward the regulations from the current law from 2005, with changes and additions where the need was revealed by the practice under the existing act.

Changes in issuers’ reporting requirements

Companies listed on the main market of the Warsaw Stock Exchange and NewConnect will be required to release year-end and interim reports as well as disclose inside information. This is more of an evolution in reporting requirements than a revolution.