An alternative investment fund is one of the investment structures provided for by Polish law. This is a solution enjoying unflagging popularity for several years. Concurrently, tax regulations in Poland are still in flux. This also applies to AIF, although in this case they continue to be beneficial. For this reason, in this material we will look at how AIF currently operates from the tax settlement perspective.

Tax exemptions

Exemption from the capital gains tax

It is possible for an Alternative Investment Fund to obtain exemption from the tax on the profits from the sales of shares or stocksif such an AIF held at least 5% of the shares of a given company before the sale, however, a requirement of holding such shares or stocks for two years applies here. This exemption does not apply in the case of disposing of the shares or stocks of companies whose asset value directly or indirectly consists in 50%, or more, of real property located in Poland.

This is a change with regard to previous years. The required shareholding level has been reduced from 10% to 5%.

Exemption from dividend taxation

In the case of alternative investment companies in the form of limited companies, it is possible for AIF to benefit from the exemption from dividend taxation when the requirements stipulated for such exemption are fulfilled (except for the income obtained by a general partner from participation in the company’s profits).

Requirements stipulated for the exemption:

  1. the disburser of the dividend and other income from profit participation of legal persons is a company having its registered office or management board in Poland;
  2. the entity obtaining income (revenues) from dividends and other income from profit participation of legal persons is a company subject to income tax in Poland, the EU or the EEA on its total income, regardless of where it is obtained;
  3. the company owns directly no less than 10% of shares (stocks) in the company’s capital
  4. the company does not use exemption from the income tax on the total of its income, regardless of its source.
  5. and the exemption is applicable when a company receiving income (revenues) from dividends and other revenues from the profit participation of legal persons having their office or management board located on the territory of the Republic of Poland has owned shares in the company paying these receivables continuously for the period of two years.

Thin capitalisation exclusion

The entities operating in the form of AIF may benefit from full inclusion of debt financing costs in tax-deductible expenses.

Investment tax credits for the Alternative Investment Fund

For investors, natural persons wishing to invest in AIF, there exists a tax relief/investment tax credit which provides the possibility to include additional 50% of the expenditure borne when acquiring or taking up shares in an Alternative Investment Fund in the revenue acquisition costs. The deduction of expenditure is also available for investors who have acquired a company in which the AIF holds at least 5% of the shares. Or in a company in which AIF is to acquire at least 5% of the shares within 90 days from the date when the investor takes up shares or stocks. 

The deduction may be used in the tax year in which the expenditure was incurred. Thus, an investor may increase annual tax deductible costs already at the time of acquiring the investment. All acquisition costs can be additionally accounted for in the costs when disinvestment is conducted.

This investment tax credit shall be subject to the following requirements;

  • the deduction in a given year may not exceed a total of PLN 250,000 for the investor;
  • an investor is entitled to such deduction when there is a shareholder in AIF who has acquired shares financed totally or partially from European funds intended for venture capital investments in Poland (it is enough to have one shareholder in AIF with such parameters to secure the investment tax credit for other investors);
  • an investor is entitled to such deduction when they have concluded an investment agreement with the alternative investment fund regulating the rights and obligations of the AIF and the investor arising from the acquisition of shares by the investor in the alternative investment fund in which the alternative investment fund acquires or takes up at least 5% of the shares (stocks);
  • an investment agreement must be concluded between the investor and AIF (concerning an investment in a particular AIF or a joint investment with AIF in another entity, where the AIF takes up at least 5% of the shares in that entity);
  • the investor is required to have been unaffiliated to both AIF and the company being the investee, for a period of at least 2 years;
  • the investor has held shares for an uninterrupted period of at least 24 months.

The introduction of this tax credit is a novelty. It was absent in the previous regulations.

Alternative Investment Fund and cryptocurrencies – miscellaneous information

An Alternative Investment Fund in the opinion and pursuant to the decision of the PFSA and the judgment of the Provincial Administrative Court in Warsaw of 17 February 2020 VI SA/Wa 1411/19 cannot conduct investment activities consisting only in investments in cryptocurrencies. The reason was the excessive investment risk related to the nature of cryptocurrencies and exchanges on which they are traded, which, combined with the general lack of legal regulations, resulted in a negative decision of the PFSA subsequently upheld by the administrative court.

In this context, it is worth emphasizing that the case has been examined by the PFSA and Provincial Administrative Court for more than 5 years ago. During that time, new regulations appeared and the market practice has been enriched. Therefore, it is not excluded that adopting an appropriate investment policy and strategy – and convincing the PFSA to approve of it – might allow AIF to be used in the management of cryptocurrencies.

Every single new project, including the establishment of a fund or AIF, requires a new approach taking into account new market trends, with which cryptocurrencies are inextricably linked. They are recognized among foreign financial administration bodies and they will also find recognition in Poland. However, this requires a good selection of advisors for such a project, their openness to new technologies and appropriate knowledge and argumentation.

Possible non-tax changes

AIF is also subject to legal regulation changes. This year, it is proposed to significantly restrict the possibility of targeting AIF’s offer at the so-called non-professional clients. In other words, the possibility of investing in AIF’s operations for smaller investors (i.e. those who invest less than EUR 100,000 – this is the threshold for now) who are natural persons will be limited/excluded. 

Such a limitation will be supported by:

  • establishing a general prohibition on placing AIF on the market among retail clients and limiting recognition of natural persons as professional clients under Art. 70k of the Act.
  • a prohibition on raising a loan by an alternative investment fund from natural persons as well as on the use of other agreements of a similar nature where the other party to the agreement would be an individual,
  • statutory regulation of the obligation resting on the AIF manager to maintain a website.


AIF remains one of the better investment structures in Poland without the need of starting a business abroad. The regulations are constantly changing; however, from the perspective of taxation, at least those in the field of AIF seem to increase the attractiveness of the Alternative Investment Fund even more. On the other hand, however, enforcing the regulatory restrictions that the Polish Financial Supervision Authority is demanding may limit the possibility of using AIF to engage smaller investors. Time will tell how the market will react to all this.