Dear Readers,

We would like to present you the May issue of our newsletter.

First of all, we recommend you the articles regarding expected amendment to the Public Procurement Law as well as changes aimed at streamlining tax procedures.

Furthermore, we have also included the discussion of the decision of the Provincial Administrative Court in Warsaw regarding taxation of undivided profits of a company after its transformation into a partnership.

We would also like to draw your attention to an interesting judgement of the Provincial Administrative Court in Warsaw regarding obstacles in registration of trademarks composed of English expressions which have entered the everyday use in the Polish language.   

We wish you a pleasant read.

Team of the Law Firm

Draft amendment limiting the scope of application of Public Procurement Law

The value of contract or contest which requires the application of the procedure under the Public Procurement Law will be increased to 20 thousand EUR.  

This solution is provided by the draft amendment to the Public Procurement Law prepared by the Public Procurement Office. At present, entities from the public sector have an obligation to abide by the provisions of the Public Procurement Law in case of contracts with the value exceeding 14 thousand Euro.

The proposed amendment is to adjust the Polish law to the average applicable in the European Union, where the average value amounts to 21 thousand EUR. Furthermore, this solution may contribute to streamlining of the activity of the entities obliged to apply the Public Procurement Law, particularly in a situation when a contract concerns an investment of a small value. The proposed amendment may also make life easier for entrepreneurs. According to the estimates of the Public Procurement Office, enterprises may potentially receive contracts subject to the requirement of the Public Procurement Law up to the amount of 1.34 billion PLN.

Jerzy Kozerski, lawyer

Get Ready for changes in tax procedures - it is supposed to be easier and more efficient

The Ministry of Finance (hereinafter „MF”) is working on a draft amendment to the Tax ordinance and other selected acts which aims at streamlining and simplifying tax procedures.

First of all, the plan is to introduce the possibility to appoint – by electronic means 0- a general proxy for representation in all kinds of matters and procedures, before all tax authorities, without the necessity to submit a power of attorney to the case file of each and every matter.

Secondly, the draft amendment provides for facilitation of service of letters to taxpayers by allowing service of documents to a post-office box and providing a service address by a taxpayer.

The bill also aims at streamlining the system of tax interpretations, providing for such solutions as issuing individual interpretations only with regard to matters which have not been clarified in the general interpretation. The streamlining of the procedures of issuing such interpretations and improving the level of service to applicants is to be achieved by means of full digitalisation of the procedure.  

It is also planned to strengthen the system of combating tax evasion (e.g. by introducing a general clause against tax evasion to regulations) and streamline tax inspection. The latter is to be based on obtaining data from accounting books and accounting documents in a uniform electronic form.  

The draft version of the bill has lately been directed by the MF to interministerial consultations as well as public consultations. The full version of the draft amendment has been published on the website of Biuletyn Informacji Publicznej Rządowego Centrum Legislacji [Public Information Bulletin of the Government Centre for Legislation] in the tab “Rządowy proces legislacyjny” [Government legislation procedure] (

Nastazja Lisek, legal advisor trainee

Transformation of a company into a partnership versus tax on undistributed profits

Corporate income tax exemption under article 22 section 4 of the act on CIT also applies, in certain circumstances, to partnerships established as a result of transformation of a company.  

The above statement is based on the decision of the Provincial Administrative Court in Kraków in its judgement of 25 March 2014, case no. I SA/Kr 135/13.  

The heart of the matter in the discussed case was the interpretation of article 22 section 4 of the act on CIT, which provides for tax exemption on dividend or other income on account of participation in the profits of a legal person. A limited liability company (a company) which applied for an individual tax interpretation was planning a transformation into a partnership. The company possessed profits from previous years cumulated in the form of supplementary capital and other funds, and the profits were not supposed to be distributed before the date of transformation. The problem was whether the amount of undistributed profits due to the applicant at the moment of transformation would enjoy the tax exemption under article 22 section 4 of the act on CIT.

According to the tax interpretation issued in this case, at the moment on transformation of a limited liability company into a partnership, the tax obligation is transferred to the partnership. The company to be transformed ceases to exist and therefore it cannot enjoy tax exemption. The exemption cannot either be applied to the partnership being the end result of the transformation because despite the fact that it, in fact, pays out the profit it does not fulfil the conditions under article 24 section 4 of the act on CIT.  

The Provincial Administrative Court in Kraków did not share the opinion of the tax authority. In the discussed case, it should be recognised that, under the act on CIT, the company paying out the income from the share in profits of a legal person is the company (to be transformed), i.e. the entity which generated the profits in question. It is only a technical matter who is the tax remitter. In this state of facts, the tax remitter is the partnership (being the end result of transformation) but only because the company no longer exists.

Jerzy Kozerski, lawyer

Simple is not necessarily good in case of trademark registration

On 23 April 2013, the Provincial Administrative Court in Warsaw dismissed a complained of a language school from Poznań regarding registration of a trademark consisting of the words “Native English”. The court stated that the above-mentioned label does not fulfil the statutory requirements of a trademark, i.e. it does not have a graphic form and sufficiently distinctive features.

What is a trademark? It is any kind of labelling which can be expressed graphically if such can be used to distinguish the products of one company form the products of another company. The act – Industrial Property Law specifies that e.g. labels which do not distinguish goods for which they have been registered or which have entered into general use or which are customarily used in fair and established trade practices do not possess sufficiently distinctive features. The Provincial Administrative Court in Warsaw ruled that basic English words such as e.g. “Native English” are widely understood even by elder people, which means that they have entered the everyday language. Furthermore, in the opinion of the court, registration of a trademark “Native English” would prevent other entities of the same qualities from accessing the market owing to the fact that it would cause registration of a trademark composed of words which are widely understood and used on the market.       

The court did not take into account the arguments of the patent attorney representing the partnership that among registered trademarks one can find such names as English Today, Profit English, English School, Pro-English, i.e. labels which are also simple and widely understood. The court decided that an application to register a trademark is subject to individual assessment from the point of view of the circle of recipients of a trademark and potential instances of infringement of rules of fair competition.  

Therefore, in order to avoid disappointments in the Patent Office one should remember to choose an original and unique trademark.

Daria Pawelczak, trainee solicitor

This Newsletter is for general informational purposes only. It is not intended and shall not be treated as professional advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

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