Both the Polish Social Security Institution (ZUS) and the National Health Fund (NFZ) have recently taken the view that remuneration paid to a shareholder (partner) for services provided to the company should be subject to social contributions. Is Article 176 of the Polish Commercial Companies Code (KSH) still a viable and secure solution? A recent article in Rzeczpospolita features a commentary by Piotr Sekulski, PhD, on this issue.
The full article is available at the link and provides insight into how the Polish authorities currently interpret and apply Article 176 of the Code.
tax advisor Piotr Sekulski, PhD
„The idea seemed relatively simple: instead of paying a board member’s remuneration for management functions, the company would compensate them for services rendered. And so it happened – Article 176 of the Polish Commercial Companies Code, rarely used before, suddenly gained enormous popularity. It was promoted as a ready-made product, and dedicated guides began appearing on the market.(…) ”
tax advisor Piotr Sekulski, PhD
“(…) Initially, everything appeared to be in order – ZUS didn’t question remuneration based on Article 176. However, tax officers quickly realized that it was being used as a workaround to avoid health insurance contributions. Many companies adopted this solution without sufficient caution, ignoring the risks. Now, following audits, these companies may be forced to revise their filings and pay back contributions. (…) ”
If you are unsure whether remuneration for shareholder services is still a safe option, or you need help with the tax or contribution treatment of such payments – contact us. At www.outsourced.pl, we help clients properly assess the legal and tax risks of management structures based on Article 176 of the Polish Commercial Companies Code.
