Ruling description

The Provincial Administrative Court (WSA) in Warsaw found in its judgments of July 10, 2014 (case file no. III SA/Wa 582/14) and July 11, 2014 (case file no. III SA/Wa 283/14) that services rendered against payment to a partnership limited by shares (Polish abbreviation: SKA) by a limited partnership or a – limited liability company acting in the capacity of a general partner of the SKA, must be classified as services- defined in Article 8 of the VAT Act rendered by taxpayers engaged in their own independent business activities. As a result, the remuneration received by the general partner for re- presenting an SKA and managing its affairs is subject to VAT.

In the two cases reviewed by the WSA in Warsaw, the general partner was to be remunerated for managing the affairs of and representing an SKA, in compliance with the SKA’s articles of association. No separate civil law agreement was made between the general partner and the SKA concerning the actions to be taken by the former for the benefit of the latter. The Court had to decide whether the actions taken by a company acting in the capacity of a general partner should be deemed to be a provision of services subject to VAT.


The tax authorities’ position in both cases was that the relationships between the general partner and the SKA were not in the nature of corporate relationships in the meaning of the Commercial Company Code and that the parties are bound by a civil law relationship arising from their mutual obligations. The company acting in the capacity of a general partner manages the affairs of and represents the SKA while - the SKA’s articles  of association obligate it to remunerate the – general partner for its services. The Court agreed with the tax authorities that there is a direct relationship between the services provided by the general partner and the remuneration received by it, and that the general partner’s actions for the benefit of the SKA may be interpreted as being a specific business activity, - being in this case the direct management of a subsidiary (administrative services). The Court likewise agreed that the economic risk in the arrangement is also borne by the general partner and that the services it provides represent an activity carried out in an independent manner. With this in mind, the Court found that the general partner, acting as a VAT payer, renders services in the meaning of Article 8 of the VAT Act to the SKA.

It is worth noting that in handing down both of its judgments the WSA in Warsaw emulated the judgment of the Supreme Administrative Court of June 3, 2014 (case file no. I FSK 876/13), which may mean that a trend is emerging in court rulings, with the courts increasingly subscribing to the view that remuneration paid to a general partner, in compliance with the articles of association of an SKA, in consideration of representation and management of the SKA’s affairs, should be subject to VAT even when such payment is not provided for in a separate civil law agreement.

Temina Cadi Sulumuna