Management board member without remuneration

It is quite common for capital groups to nominate a member of the board of the dominating company to hold such function also in an associated company. Usually in such cases position in an associated company is not additionally remunerated, or remuneration is paid by the dominating company.

The Polish tax authorities and the judiciary are unanimous that this generates a taxable income in form of a benefit in kind for the associated company. The value of the benefit in kind should be determined based on the market value of services of a management board member.

The exemption to this rule is a situation, in which the management board member is also a shareholder and as such can expect dividend as remuneration for the function.