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The main goal of any joint-stock company is to make a profit, and dividends are a portion of that profit that the company shares with its partners. This approach is also convenient for the tax office. Therefore, shareholders expecting payouts can receive their share legally and without unnecessary formalities. In this article, we will examine the dividend payment process in Poland in detail so that you can invest confidently in local companies and maximize your returns.
It is worth noting right away that partners do not receive the entire profit, but only that portion which they themselves decide to distribute and pay out. We will pause here to elaborate on this point. The fact is that there are specific requirements from the tax office that must be met. Only then can the process be considered legal and proper. By the way, the Commercial Companies Code (KSH/ Kodeks spółek handlowych) is the regulatory document that governs dividend payments in Poland.
According to Article 192 of the KSH: The amount distributed among partners cannot exceed the profit for the last financial year, plus any undistributed profits from previous years. It also includes amounts transferred from additional and reserve capital. In addition, uncovered losses and the amount intended for replenishing the company’s reserve and additional capital should be deducted.
Thus, the company will not pay dividends when profits are low and only sufficient to cover losses from previous years. The board of directors may also decide to retain profits for financing current operations or future investments.
