The Tax Ordinance provides for universal succession, under which a legal person formed through
a merger of legal persons and/or commercial companies or partnerships, or a legal person taking over a legal person or commercial company or partnership, enters into all of the rights and obligations provided under tax law, including rights and obligations arising out of decisions issued under tax regulations.
An exception to the rule of universal succession in the case of a merger is that the acquirer or newly formed company is not entitled to use the tax losses generated by the acquired company.
Corporate income tax effects
As a rule, a merger of capital companies with their registered office in Poland or elsewhere in the EU or EEA is tax-neutral for both the acquirer and the target and for the shareholders of the target or the merging companies (so long as they do not receive additional consideration in cash). Tax neutrality will not be maintained if the merger is not conducted for valid economic reasons, but the main reason or one of the main reasons for the transaction is tax avoidance.
In the case of a merger in which the acquirer or newly formed company obtains assets whose value is higher than the par value of the shares allocated in exchange to the shareholders of the target, the excess in the value of the assets of the target received by the acquirer or newly formed company over the par value of the shares allocated to the shareholders of the target also does not constitute income, unless the acquirer holds less than 10% of the share capital of the target.
The process of merger does not allow the acquirer or newly formed company to step up the basis of the acquired assets for tax purposes. In this respect, the rule is that the existing tax basis is carried forward, under the principle of continuation.
Indirect taxes (VAT, transaction tax)
As a rule, a corporate merger is not subject to VAT, and is also neutral for purposes of the tax on civil-law transactions.