Limited partnerships try to find ways to avoid double taxation

A change in taxation of limited partnerships is rather certain. Only the date of entry into force of the new regulations is a question mark. Business entities are hastily looking for ways to avoid negative effects of the amendment and being required to tax their incomes twice. A change in the proportion of profit distribution or transformation of the partnership may be the solution.

Risky double taxation of the partnership’s profit – COMMENTARY by Mateusz Pietranek

Transformation of a limited partnership into a limited liability company and application of the new planned mechanism, i.e. the Estonian CIT, involves tax risk. The expert points out that in this context, the amendment to the act stipulates that in a situation where the transformation takes place and the first tax year of the company created as a result of the transformation is also the first year of applying the Estonian CIT, the company is obliged to determine and tax the income from the transformation equal to the surplus the market value of its assets, determined as at the transformation date, above the tax value thereof determined as at that date. It seems that abandonment of this regulation by the legislator would be an additional incentive for taxpayers to apply the Estonian CIT. 

The article is available on Prawo.pl:
https://www.prawo.pl/podatki/sposoby-na-zmiane-zasad-opodatkowania-spolek-komandytowych,504644.html