End of disputes: Simplified mergers of sister companies are tax neutral
On 18 September 2025, an act amending the Energy Law will come into force, which also includes an amendment to the CIT Act. In response to numerous interpretative disputes, the legislator clearly confirms that emission-free mergers of so-called ‘sister companies’ are tax neutral.
Below we present the most important changes covered by the act.
Key Changes
• Tax-neutral mergers of sister companies – The amendment clearly states that no revenue is generated in the case of mergers carried out on the basis of Article 515¹ of the Commercial Companies Code, which eliminates tax risk and provides greater flexibility in the reorganisation of capital groups.
• Division by spin-off treated as a contribution in kind – The tax consequences of a division by spin-off will be analogous to those of a contribution in kind of an organised part of an enterprise (ZCP), which in practice ensures the tax neutrality of the transaction and simplifies restructuring planning.
• End of disputes with the tax authorities – Reduction of the risk of disputes with the tax authorities, compliance with the case law of administrative courts and greater legal certainty for entrepreneurs.
This is therefore an important step towards increasing legal certainty, stabilising the tax environment and facilitating business activity for entrepreneurs.
Simplified mergers (Article 5151 § 1 of the Commercial Companies Code)
A simplified merger, known as a non-issue merger, is possible when one shareholder holds all the shares in the merging companies (known as a merger of sister companies). In such a case, the acquiring company does not issue its shares to the shareholder of the acquired company.
The lack of new share issues became the basis for the tax authorities to question the tax neutrality of such an operation. In practice, the generation of revenue under Article 12(1)(8d) in connection with a non-cash merger raised interpretative doubts, and the tax authorities often interpreted this provision to the detriment of taxpayers.
The tax authorities took different positions depending on the specific merger model. In the case of a merger of a parent company with a subsidiary, the neutrality of such an operation was often pointed out, while in the case of mergers, the tax authorities often interpreted this provision to the detriment of taxpayers.
The tax authorities took different positions depending on the specific merger model. In the case of a merger between a parent company and a subsidiary, the tax neutrality of such an operation was often pointed out, while in the case of mergers between ‘sister’ companies, the authority could consider that the difference between the market value of the assets and the issue value of the shares constituted taxable income.
For example, in the interpretation of 20 February 2025, ref. no. 0114-KDIP2-2.4010.689.2024.2.SP, the Director of the National Tax Information Service stated that when the merger involved two subsidiaries, Article 12(1)(8d) applies. The authority stated that the market value of the assets of the acquired company received by the acquiring company constitutes taxable income because no shares were issued that could constitute the issue value. Similarly, in the interpretations of 20 August 2025, ref. no. 0111-KDIB1-1.4010.251.2025.5.RH, and of 13 August 2025, ref. no. 0111-KDIB1-1.4010.298.2025. 3.AND. However, this interpretation was contrary to Directive 2009/133/EC, which ensures the tax neutrality of capital restructuring.
The situation was also complicated by conflicting case law of administrative courts. Most administrative courts presented a position favourable to taxpayers and sided with them, pointing to the neutrality of such transactions, for example:
• Provincial Administrative Court in Warsaw of 10 July 2024, ref. no. III SA/Wa 947/24,
• Provincial Administrative Court in Warsaw, 3 October 2024, ref. no. III SA/Wa 1425/24.
However, the pro-fiscal approach was approved, inter alia, in the judgment of the Provincial Administrative Court in Wrocław of 25 June 2024 (ref. no. I SA/Wr 104/24).
Solution from 18 September 2025.
The amendment adds a key sentence to Article 12(1)(8d) of the CIT Act, which clearly stipulates that no revenue arises in the case of a merger carried out pursuant to Article 515¹ § 1 of the Commercial Companies Code.
The amendment to the Act dispels previous doubts, thanks to which simplified mergers will no longer be perceived as risky. The new provisions are a long-awaited and positive change that removes significant tax barriers in restructuring processes. They will enable entrepreneurs to shape their capital structures more freely and effectively, without fear of negative consequences.
If you are planning to reorganise your business, our comprehensive support covers both strategic planning and verification of compliance with tax neutrality conditions.