Limited partnerships will pay corporate income tax

Dec 8, 2020

From 01.01.2021 limited partnerships will become taxpayers of corporate income tax. Until then, limited partnerships will remain tax transparent and only their partners will be taxed. Whereas from that date limited partnerships will be taxed similarly to limited liability companies. The reduced tax rate will be 9% – if annual revenues are not more than EUR 2 million, and 19% in other cases. In addition to income taxation of the partnership itself, the partnership’s profits paid to its partners will be taxed as well. Partners of limited partnerships will be subject to taxation on their income in relation to their share in the partnership’s profit.

These changes were introduced by the Act of 28.11.2020 amending the act on personal income tax, the act on corporate income tax, the act on flat-rate income tax on certain revenues earned by natural persons and some other acts (Journal of Laws of 2020, item 2123, of 30.11.2020).

The possibility to postpone the date

The limited partnership may decide that the amended provisions will apply to this partnership and both the revenues and the costs related to participation in this partnership from 01.05.2021. In such a case, the limited partnership obtains the status of a corporate income tax payer as of 01.05.2021.

Important: The decision to make use of the abovementioned possibility must be taken by 31.12.2020. As a rule, if nothing else results from the deed of limited partnership, this decision must be made by the partners in the form of a resolution.

The requirement to close the accounting books

In any case, the limited partnership is obliged to close the accounting books on the day preceding the date of obtaining the status of a corporate income tax payer by that partnership.


The limited partnership will continue the following, made before the date on which it became a taxpayer of corporate income tax:

  • tax valuation of assets, in particular fixed assets,
  • adopted depreciation methods,
  • the rates and periods of depreciation,
  • the amount of depreciation write-off previously made from these fixed assets and intangible assets with transparent taxation.

The previous profits

Generally, the provisions in force before the date on which the limited partnership became a taxpayer will apply to income of its partners obtained from participation in the profits of this partnership, and earned before the date on which the partnership became a taxpayer of income tax (i.e. before 01.01.2021 or 01.05.2021, depending on when the partnership becomes a taxpayer).


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