Object of taxation
(a) Taxable income or
(b) alternatively distributable net profits of the company solely, basically calculated based on the accounting regulations (this alternative is commonly called 'Estonian CIT')
Tax rate
-
(1) CIT from taxable income:
(a) 19% - standard rate;
(b) 9% - reduced tax rate applicable to income from operational activity obtained by (a) so called 'small taxpayers' (i.e. the ones whose revenues had not exceeded EUR 2 million gross in the year preceding a given tax year) or (b) taxpayers starting-up their buisness in a given tax year; condition: revenues of those taxpayers do not exceed EUR 2 million net in a taxable year;
(2) Alternative CIT taxation of distributable net profits solely, so called 'Estonian CIT':
(a) 20% of distributable net profit;
(b) 10% of distributable net profit - applicable to (a) 'small taxpayers' or (b) taxpayers starting-up their business in a given tax year.
(3) 'Minimum CIT'
10% - applies to taxpayers incurring / achieving specifically calculated loss or low profitability from operational activity (up to 2% revenues).
(4) Global Minimum Tax
As of January 1, 2025, the global minimum tax, also known as the compensatory tax (implementation of the Global Minimum Tax (GLOBE) under the so-called Pillar II implemented based on Council Directive (EU) 2022/2523), is effective in Poland.
The tax covers component units of international and domestic groups operating in Poland, which have reported revenues of at least €750 million in the consolidated financial statements of the ultimate parent company in at least two of the four tax years immediately preceding the tax year under review.
The regulations stipulate a minimum effective tax rate of 15%. If the effective rate in a given jurisdiction is below 15%, an obligation will arise to calculate and pay a compensation tax (in Poland or abroad).
Tax liability
Unlimited
(a) Legal entities, including corporations as well as
(b) limited partnerships, partnerships limited by shares and general partnerships in certain circumstances due to the nature of their partners
- resident or managed in Poland, on worldwide income.
Limited
Foreign CIT taxpayers, neither resident nor managed in Poland, on income obtained in Poland.
Financial year
Calendar year, although the financial year (which is also a tax year) may be different than a calendar year.
Accounting
Generally, accounting books kept in accordance with Polish Accounting Act.
For 2025, the obligation to electronically send accounting books to the tax office, after the end of the fiscal year, in the unified form of a SAF-T file (Standard Audit file for Tax) has been implemented - for capital groups and taxpayers with revenue earned in the previous fiscal year exceeding the equivalent of €50 million.In subsequent years, this obligation will successively cover the following groups of taxpayers.
Loss carryback
Basically not possible.
Certain specifics in case of taxpayer passing from standard CIT taxation of taxable income to the alternative mode of CIT taxation of distributable net profits only.
Loss carryforward
Basically, losses incurred within each of two separate sources of income (i.e. opertional vs investment income) may be set-off with profits obtained from that source of income (exclusively) within the following 5 years, no more than 50% of loss annually.
Possibility to make a deduction by the amount of up to PLN 5 million in one of the above mentioned 5 years without regard to limitation to 50% of loss annually in this year.
Certain set-off restrictions have to be observed, particularly in case of restructuring.
Shell company purchase
Under certain circumstances loss carryforwards may be lost in case of restructuring.
Operating expenses
Basically tax deductible costs are the ones incurred to generate taxable revenues from a given source of income (operational vs investement income), or to maintain or secure that source of income.
There is a catalogue in the Polish CIT Act of various kinds of expenses whose tax deductability is excluded or limited.
If the taxpayer chose alternative mode of taxation of distibutable net profits only - taxable profit would be basically calculated based on the accounting regulations.
Transfer prices
Arm’s-length basis.
Certain conditions have to be observed to perform a TP adjustment.
Safe harbour provisions applicable to certain 'low value adding services' and loans.
TP documentation (TPD) may be required, basically depending on the type and value of the trasaction between the related parties. TPD has to contain particular elements specified in the Polish CIT & TP regulations, basically including benchmarking study. General requirements as to TPD may be simplified or removed, e.g. with regard to transactions between Polish-based parties under certain circumstances.
Taxpayers are also obliged to fulfill additional reporting obligation i.e. submit to the tax office a yearly information on the applied transfer prices.
Certain TP obligations apply respectively to transactions with entities from 'tax havens'.
Polish Ministry of Finance issued numerous guidelines with regard to various TP topics.
Interest on debt financing of acquisition of shares
Generally deductible, subject to interest barrier.
However, no deductibility when it comes to acquisitions (equity transactions) within the group and for interest payments in case of use of 'debt-push-down' mechanism in restructuring.
Debt / equity
No legally difined limits.
Various interest barriers for CIT purposes have been in force throughout the years.
Tax depreciation
Depreciation methods: (a) straight-line depreciation or (b) accelarated degressive (for machinery, equipment and means of transport, excluding passenger cars).
Write-offs are made annually or in equal monthly / quartely instalments.
Yearly tax depreciation rates are specified in the appendix no. 1 to Polish CIT Act.
Standard tax depreciation rates may be increased for extraordinary wear and tear or for machinery and equipment that undergo rapid technological development.
Depreciation rates may be set individually, subject to certain limitations, for used or improved fixed assets which are for the first time put into service by a given taxpayer.
The special rules for determining the individual rate are applied to micro-, small- or medium-sized entrepreneurs for self-generated fixed assets that are non-residential buildings (premises) and structures, included in groups 1 and 2 of the Classification of Fixed Assets that are first entered in the records of fixed assets and intangible assets of a given taxpayer, where this fixed asset is located in an area in municipalities located in districts or cities with district rights with a high unemployment rate, which are also municipalities located in districts or cities with district rights with low wealth index.
Standard tax depreciation rates may be decreased by the taxpayer on the annual basis.
No obligation to make depreciation write-offs on assets on certain assets whose initial value does not exceed PLN 10,000; expenses incurred for their acquisition are then deductible in the month in which they are put into use.'Small taxpayers' or the taxpayers starting-up their buisness in a given tax year may enjoy one-off depriciation write-offs in the combined amount of up to EUR 50,000 yearly from machinery, equipment and means of transport, excluding passenger cars (de minimis aid).
Taxpayers may enjoy one-off depreciation write-offs in the combined amount of up to PLN 100,000 yearly from purchased brand new machinery and equipment.
No tax depreciation of residential buildings and premises.
Tax deductible depreciation write-offs from investment properties made by 'real estate companies' (as defined in the Polish CIT Act) may not be higher in a given tax year than accounting depreciation write-offs thereof.
Provisions
Tax deductible: (a) write-downs on amounts receivable provided that debt uncollectibility was substantiated properly in accordance with the Polish CIT law; (b) allocations to company social benefits fund under certain conditions, (c) allocations to fund, separated in reserve capital, established for investment purposes, under certain conditions.
Non-tax deductible: basically provisions recognized in accordance with the accounting regulations, except for certain types of provisions recognized by financial institutions explicitly indicated in the Polish CIT Act.
Thus non-tax deductible are e.g. provisions for employee benefits, such as unused leaves, retirement and disability benefits, post-mortem benefits, jubilee awards etc. as well as provisions for other uncertain liabilities, future expenses or impending losses.
Motor vehicle expenses
Basically depreciation over at least 5 years (in the case of used vehicles may be shortened to 2.5 years).
Depreciation of passenger cars, paid leasing fees and their insurance - tax deductible are the amounts allocated to car value not higher than PLN 150,000 (for electric cars the threshold is basically PLN 225,000, except for insurance).
Passenger car operating expenses (including non-deductible VAT, if this is the case) where the car is not exclusively used for business purposes - tax deductibility limited to 75% of incurred expenses.
Deduction of expenses incurred on behalf of employees due to use of private cars for taxpayer's business purposes up to official rate per kilometre (PLN 1.15 / 0.89).
Certain vehicles may be excluded from tax restrictions provided for passenger cars (e.g. van, multi-purpose vehicle, pick-up) under certain conditions.
Non-deductible expenses
Representation expenses i.e. basically considered as the ones that are image-related (advertising costs are 100% deductible);
Gifts and donations;
Business income tax;
Expenses directly related to non-taxable or tax-paid income/revenues (from interest, royalties and dividends);
Payments exceeding PLN 15,000 (a) made without bank transfer or (b) transferred as remuneration for supply of goods or services to bank account other than the one disclosed on so called 'white list' of the taxpayers kept by the tax administration or (c) made bypassing the mandatory 'split payment mechanism', where applicable for VAT purposes.
Note: tax deductible depreciation write-offs from investment properties made by 'real estate companies' (as defined in the Polish CIT Act) may not be higher in a given tax year than accounting depreciation write-offs thereof. Global minimum tax, national minimum tax, minimum tax on under-taxed and equivalent taxes imposed in countries other than the Republic of Poland.
Interest barrier
Surplus of interest (and other debt financing costs) exceeding either (a) 30% of EBITDA specifically calculated for CIT purposes or (b) PLN 3 million - depending on which is higher.
Surplus not deducted in a given tax year may be settled within the following 5 years, subject to limits applicable in those years.
Interest and royalties to intra-group companies
Interest from debt financing are basically subject to interest barrier, regardless of whether paid to related or non-related parties.
Withholding taxes
Generally 20% for interest, royalties and certain intangible services; in the case of capital gains - 19%.
Polish-based payer is obliged to withhold and pay the tax (also on behalf of the local beneficairy of investement income, where this is the case).
A DTA can provide for a lower rate of taxation or non-taxation; exemptions provided for payments to intra-group companies on the basis of the relevant EU Directives and domestic regulations.
'Due care' is required in order to use the relief / exemption; the tax residence certificate of the foreign taxpayer has to be obtained; specific statement on beneficial owenrship is required in order to use the exemption for intra-group payments.
Relief or exemption is granted by reduction at source or with use of pay & refund mechanism.
Pay & refund mechanism applies basically to surplus of payments made to related party exceeding PLN 2 million in a given tax year, unless the payer submits the relevant statement to the tax office on lack of obstacles to apply the relief / exemption or the authority issued the relevant opinion on use of preferences.
Refund claim needs to be accompanied by detailed documentation to substantiate entitlement to use preference. Refund claim is submitted by the payment beneficiary (e.g. foreign taxpayer) or by the paying party under certain circumstances.
Payments for intangible services are not covered by the WHT pay and refund system.
Interest
20% tax rate or lower tax rate per applicable DTA or tax exemption based on the EU Interest and Royalty Directive for group purposes and domestic regulations.
Royalties
20% tax rate or lower tax rate per applicable DTA or tax exemption based on the EU Interest and Royalty Directive for group purposes and domestic regulations.
Dividends
19% tax rate or lower tax rate per applicable DTA or tax exemption based on the EU Parent-Subsidiary Directive for group purposes and domestic regulations.
Controlled foreign corporation (CFC) rules
Taxation of certain income of foreign controlled entities / permanent establishments thereof at the level of the controlling Polish CIT taxpayer.
CFE is defined in Polish CIT Act by use of various criteria:
1) controlled entity based in tax haven,
2) controlled entity based in the country having no agreement with Poland nor EU on cooperation in the area of tax information exchange,
3) controlled foreign entity (incl. by way of holding more than 50% share in it by the Polish taxpayer, individually or jointly with other specified parties) whose effective taxation in the foreign country is 14,25% or less and:
(a) whose passive revenues represent at least 33% of its total revenues or
(b) whose passive revenues are lower than 30% of value of certain assets generating those revenues and those assets basically constitute 50% of value of entity's all assets or
(c) who achieves specifically calculated high rate of return from held assets [more than 20% x (carrying value of assets + annual employment costs + accumulated value of depreciation write-offs)] and achieves less than 75% revenues from transactions with non-related parties based locally.
Hybrid mismatches
Mismatches which, due to differing fiscal recognition methods, lead to a different tax treatment in different countries and may under certain circumstances lead to profit shifting or profit reduction (resulting in double deduction of certain costs or losses in different countries or their deduction in one country without taxation in another).
Neutralized by regulations which, as a rule, provide for non tax deductability of related costs or related income recognition.
National parent- subsidiary exemption
Dividends (basically certain profit distributions) are tax exempt. Conditions:
Minimum share: 10%
Qualifying period: 2 years of unbroken possesion
Generally, capital gains, liquidation gains are subject to taxation.
Capital losses are generally tax deductible, with rules for loss carryforwards against capital gains.
International investments
Dividends (basically certain profit distributions) are tax exempt. Conditions:
(a) minimum share: 10% (in case of beneficiary being EU or EEG resident) or 25% (in case of Switzerland)
(b) qualifying period: 2 years of unbroken possesion
(c) cooperation in the area of tax information exchange between Poland and another country.
Generally, capital gains, liquidation gains are subject to taxation.
Capital losses are tax deductible, with rules for loss carryforwards against capital gains.
International parent- subsidiary exemption and portfolio investments
Tax credit method in case of foreign dividends and capital gains.
Tax credit carryforward of foreign corporate income tax is possible in certain circumstances (with regard to revenues from participation in profits), where Poland has a DTA with another non-EU nor EEG country; minimum share in foreign company: 75%, qualifying period: 2 years of unbroken possesion.
Tax exemption of dividends from foreign company being EU, EEG or Swiss resident; minimum share in foreign company: 10% (or 25% in case of Switzerland), qualifying period: 2 years of unbroken possesion.
Preferences apply provided that there is a cooperation in the area of tax information exchange between Poland and another country.
Generally, capital gains are subject to taxation.
Capital losses are tax deductible, with rules for loss carryforwards against capital gains.
Goodwill amortisation
In case of asset deal: purchase or financial leasing (as defined in Polish CIT Act) of enterprise or organized part thereof
Amortization: 5 years minimum.
Group taxation / pooling
Tax groups
Companies established in Poland linked in a financial hierarchy can under specified circumstances constitute a tax group for CIT purposes.
Parent company must hold at least 75% share capital in other group members.
Minimum duration of group: 3 years
Members of tax group may only be: limited liability companies, joint-stock companies and simple joint stock companies.
Parent company represents the group for tax purposes, collects and pays the tax on behalf of the whole group.
Joint responsibility of all group members for tax liabilities of the group.
The taxable profits or losses of the members of a group are summed up, with rules applicable to separate sources of income (operational vs investment income). Group losses are set-off against group profits respectively with use of standard rules for loss carryforwards. Group losses cannot be set-off against profits of members of group after end of the group. Losses of members of group incurred before creating the group may be set-off against group profits under certain circumstances.
Pooling
N/A
