New regulations came into force from 1 January 2011 relating to the taxation of income received under equity based incentive plans.

In Poland the general rule is that options/RSUs and ESPPs are taxed on exercise/vesting and purchase respectively. A very attractive exemption enables tax to be deferred until the sale of the shares and the tax rate to be reduced to a flat rate of 19% (as opposed to a progressive rate of taxation of between 18 and 32%).

Prior to the new regulations coming into force the deferral was possible if two conditions were satisfied:

  • the shares were newly issued; and
  • the shares were acquired based on a resolution passed in the company's General Shareholder's Meeting

The new regulations have introduced two main changes:

  • shares can be existing or treasury shares as well as new issue; but
  • the beneficial treatment will now only be applicable for shares issued by companies located within the EU or EEA.  

The requirement that shares are acquired based on a resolution passed in the company's General Shareholder's Meeting still remains.

The changes mean employees that receive awards over shares issued by non-EU or EEA companies will no longer be able to take advantage of the more favourable tax treatment.