Poland’s exit-tax base challenged in Advocate-General opinion

An employee-shareholding dispute

The reference concerns an Italian and US citizen working for a Polish company, with Polish tax residence from 2023 and a planned move to Germany after employment ends in 2028. His holdings include shares acquired privately and through employee incentive programmes. He challenged a December 2024 advance ruling that included gains accruing before Polish residence and denied offsetting losses on other assets.^[2]

Poland’s Law of 26 July 1991 on income tax on natural persons addresses exit taxation in Article 30da. For private shareholdings, it specifies at least five years’ Polish residence within the preceding ten; Article 30db excludes assets whose combined market value does not exceed PLN4 million. The taxable gain compares market value with tax value; the rate is 19% where tax value is established. Article 30de permits an application for instalments over no more than five years for EU or qualifying EEA moves, with security where there is a real recovery risk.^[3]

Two objections to the taxable base

Kokott considers Article 45 TFEU’s free movement of workers incompatible with taxing gains that arose abroad before the employee became resident. She also rejects calculating exit tax using only assets showing gains while disregarding unrealised losses. Her reasoning distinguishes the departing employee’s cash-flow disadvantage from the treatment of a resident selling a portfolio and recognising both gains and losses.^[1]

The payment conclusion is different. The opinion accepts that collection can be deferred on request through instalments over a maximum of five years without awaiting an actual sale. It therefore does not support an unconditional right to postpone all payment until disposal. Kokott distinguishes allocating taxing rights from ensuring effective recovery.^[1]

For multinational employers, the case highlights relocation and employee-share-plan risks: historic gains, portfolio losses and payment timing are separate questions. This remains an Advocate-General opinion, not a Court judgment or enacted amendment; it establishes neither automatic relief nor a new commencement date.^[1]