Payment of dividend exempt from tax if the legal predecessor of the dividend recipient held shares for two consecutive years
25 April 2020
Payment of a shareholder’s remuneration for the automatic redemption of shares or dividends may benefit from tax exemption pursuant to art. 22 paragraph 4 et seq. of the CIT Act, in a situation where the legal predecessor of a shareholder had shares continuously for a period of 2 years.
The Company may use uninterrupted 2-year period of holding shares (stocks) by its legal predecessor.
The Supreme Administrative Court in the judgment dated February 14, 2019, reference No. II FSK 471/17 recognized that the condition of exemption from withholding tax in the form of a 2-year uninterrupted holding of shares (stocks) as a substantive condition of tax exemption is subject to legal succession in accordance with art. 93c of the Tax Code.