Another Gap in the Polish Lada – Does Hiding the Income Pay Off?

According to “Dziennik Gazeta Prawna”, people who do not disclose their income next year and apply for immunity from October 2022 to the end of March 2023, will pay only 8% tax and will have a clean slate.

This way, the legislator encourages hiding earnings as Andrzej Wapowski, legal advisor at ENODO Advisors in an interview with “DGP” comments.

The Amendments in Polish Lada:

The provisions on it were included in the Polish Lada, i.e. the amendment to tax laws adopted by the Sejm on October 29, 2021.

As the newspaper informs, abolition is to encourage the disclosure of previously untaxed income to the tax office or to withdraw from tax optimization. Whoever does this will pay an 8% transitional lump sum instead of the standard PIT, CIT, registered lump sum, or tax card. So, you will have to pay 1% from the application for the abolition of hidden earnings, but not more than 30 thousand zlotych.

The key thing is that it will cover not only the current income, i.e. before 2022. It will be possible to apply for amnesty about the income obtained by the date of applying, i.e. de facto until March 31, 2023. Moreover, according to experts, when considering applications there can be no discretion by the tax office.

However, there are some risks. If during the year the tax office catches a taxpayer concealing income, he will have to pay tax at the standard rate and interest on late payment. Liability under the Fiscal Penal Code may also come into play. However, the sanction rate of 75% does not apply here, because this only applies to expired tax liabilities.

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.