A New Tax is Being Prepared in Poland – the Process Highlights

As the Financial Times reports, Poland is giving way to the introduction of a minimum new tax on companies. The country’s standpoint in this matter may be related to the expected breakthrough in the National Recovery Plan.

The minimum tax rate for international corporations would cover enterprises with a turnover of at least EUR 750 million a year. Legislation to this effect was backed by MEPs in the plenary last week. The vote establishes the European Parliament’s opinion on the issue, which will have to be taken into account when Community member states adopt the final draft.

The Govt Decision to Implement New Tax:

The French Finance Minister, Bruno Le Maire, quoted by the newspaper, stresses that an agreement on this issue is possible and should be reached within a month. The politician points out that the positions of Poland and other countries have significantly consolidated.

As Business Insider Polska reminds us, the Polish government torpedoed work on the tax during the April meeting of the Economic and Financial Affairs Council (ECOFIN). Deputy Finance Minister Artur Soboń pointed out then that the change concerning taxation of the largest companies is based on two pillars.

The second pillar is to introduce a global effective new tax rate for enterprises in the European Union at the level of 15% for companies with global revenues exceeding EUR 750 million. The first pillar, in turn, is to relocate the tax base of the largest companies to countries where services and goods sold by these companies are consumed and used. Poland wants to tax digital giants, but the government sees this as a package deal and maintains the proposal to link the two pillars.

Poland’s resistance to a minimum new tax for multinational corporations, the Financial Times said, was linked to the European Commission’s disapproval of Poland’s National Recovery Plan. However, all signs point to a breakthrough in this matter within days, which will influence Warsaw’s stance towards the levy. The minimum new taxes rate for international corporations is to come into effect in 2023.

What This Means for Businesses in Poland

Tax policy changes in Poland have direct implications for both domestic and foreign-owned businesses. Companies operating in Poland must stay informed about regulatory developments to optimize their tax position and maintain compliance. The Polish tax system includes CIT (19% standard, 9% for small taxpayers), VAT (23% standard rate with reduced rates of 8% and 5%), and various sector-specific levies.

For international entrepreneurs and investors, understanding the Polish tax landscape is essential for business planning. Poland offers several attractive incentives including the Polish Investment Zone (up to 15 years of CIT exemption), R&D tax relief (up to 200% deduction), and the IP Box regime (5% effective CIT rate on qualified intellectual property income). Professional tax advisory can help identify the most beneficial structure for your specific situation.

The interplay between Polish domestic tax law and international tax treaties is particularly important for foreign-owned entities. Transfer pricing regulations, withholding tax provisions, and anti-avoidance rules (GAAR) require careful navigation to ensure both compliance and optimization.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our tax advisory services in Poland, or contact us for a free consultation.