On Wednesday, March 13, 2002 Poland’s Supreme Court reversed a ruling of the Supreme Administrative Court which required that monies invested by foundations in securities be subject to corporate income tax.
The case before the Supreme Court stemmed from an attempt by Poland’s Treasury Chamber to tax revenues that the Foundation for Polish Science invested as part of its endowment during the years 1995-1997. The amount of assessed tax was in excess of $20 million.
Last year, Poland’s Supreme Administrative Court sided with the Treasury Chamber, ruling that “an expenditure” of funds to purchase securities could not be considered a furtherance of the Foundation’s statutory purposes. Inexplicably, the Supreme Administrative Court ruled that the only place where a foundation could invest its funds was a bank. Any other type of investment, according to the Court, would constitute “an expenditure” inconsistent with a foundation’s statutory purposes and thus taxable under Poland’s corporate income tax law. Wednesday’s Resolution of the Supreme Court reverses this ruling.
According to Gazeta Wyborcza, Poland’s most popular daily newspaper, the Supreme Court, deciding the case in its complete complement of seven justices, deliberated for approximately 90 minutes, before rendering the decision. “In a short justification of the resolution, the leader of the panel, Walerian Sanetra, confirmed that the acquiring of securities by the Foundation falls within its statutory purposes.” A written justification of the resolution should be available within a few weeks.