11 May
Conversion of a limited partnership
We support businesses in the process of restructuring
Conversion of a limited partnership
Since 2021, changes in the taxation of a limited partnership came into effect. From that moment, there partnerships became subject to the corporate income tax. Consequently, generated profits were burdened by double taxation. The end of the year is a good time for evaluating and examining the conversion of a limited partnership into a partnership not subject to the statute on CIT. This conversion process is time-consuming and require complex tax and legal analysis to limit the risk of error and to guarantee the smooth functioning of a business.
What sets us apart?
What sets us apart?
- Individual approach.
- Holistic view of the client’s business situation.
- Minimizing the client’s need to be involved in the processs.
- Comprehensive tax and legal advice.
- A wealth of experience working with market leaders from a range of industries.
- Recognizing and understanding the needs and expectations of clients.
Our Offer
Analysis of the tax and legal situation of limited partnerships
During the audit, we will verify the possibilities for limiting tax costs, considering available restructuring options and without carrying out any change in corporate form.
Our aim is to facilitate as much as possible the difficult decision on any potential restructuring. The analysis will provide the members of the limited partnership with a proposal of available solutions, with a breakdown of the financial and tax consequences of each option.
During the audit, we will verify the possibilities for limiting tax costs, considering available restructuring options and without carrying out any change in corporate form.
Our aim is to facilitate as much as possible the difficult decision on any potential restructuring. The analysis will provide the members of the limited partnership with a proposal of available solutions, with a breakdown of the financial and tax consequences of each option.
Restructuring
Based on the results of the analysis and the most optimal solution for your business, we will conduct comprehensive implementation of restructuring measures in your partnership.
As part of our support, we also offer assistance in negotiations with customers, suppliers and lenders, and carry out all aspects of conversion of corporate form.
All measures taken during restructuring can be preceded with the added security of obtaining individual tax interpretations.
Based on the results of the analysis and the most optimal solution for your business, we will conduct comprehensive implementation of restructuring measures in your partnership.
As part of our support, we also offer assistance in negotiations with customers, suppliers and lenders, and carry out all aspects of conversion of corporate form.
All measures taken during restructuring can be preceded with the added security of obtaining individual tax interpretations.
FAQ
Will the changes impact taxation for earlier periods?
The adopted changes will not affect the manner of taxation of preceding periods in which the limited partnership operated. These changes involve only taxation of income earned by limited partnerships in the future.
How should partnerships settle their taxes for 2020/2021?
Each limited partnership will be required to close out its accounting books at the end of the day before the date when it obtains the status of a payer of corporate income tax. If a limited partnership decides to postpone its taxation until 1 May 2021, and the last day of its financial year falls between 31 December 2020 and 31 March 2021, the partnership may decide not to close out its accounting books on that date, but extend its financial year through 30 April 2021.
How long does the tax and legal analysis take?
The tax and legal analysis is conducted over the course of 10–15 business days. The exact length of the analysis will depend on the complexity of your business and the need to assemble all essential data, documents and information.
Conversion of a limited partnership takes one to three months.
Is conversion the only solution?
Whether conversion of the corporate form of the limited partnership is the best solution for your business will be examined during the comprehensive tax and legal analysis. The ultimate decision will depend on such factors as the complexity of your business and the level of its revenue and costs.
Is taxation of limited partnerships a foregone conclusion?
Yes, on the 28th of November 2020 the president signed a law which introduced the taxation of limited partnerships. On the 30th of November 2021, the law officially went into effect.
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