Changes to Corporate Income Tax in 2024

The Ministry of Finance recently prepared several changes in fiscal regulations that apply to taxpayers paying corporate income tax, or CIT. The goal behind the amendments is increasing budget revenue through, among other things, limiting the possibilities of tax optimization. Polish companies need to prepare for more detailed legal provisions and stricter interpretation of the existing corporate income tax rules.

Among the most important reforms is the separation of capital gains and other profits (i.e. profits gathered through business activity). Taxpayers are not allowed to deduct expenses from the entirety of their profits. Capital losses may be written off only against the tax related to capital gains.

The lawmakers also introduced limits with regard to expenses on tax-deductible intangible services (such as marketing, data processing or advisory services), licenses, and insurance and guarantees written off as tax expenses of related entities and entities registered in corporate income tax havens. The limit is 5% of EBIDTA for expenses exceeding 3 billion PLN. The limit does not apply to entrepreneurs who concluded APAs (advance pricing arrangements).

There is a series of amendments with regard to tax capital groups. The average amount of share capital for companies creating capital groups was decreased to 500 000 PLN from 100 000 PLN. The level of profitability of a capital group was brought down to 3%. Another decrease concerns the amount of direct share of the dominant company in their subsidiaries. All in all, creating a tax capital group has become easier.

That is not all. The Ministry of Finance introduced a new corporate income tax. The new levy will apply to owners of commercial real estate (shopping malls, office buildings, etc.) worth more than 10 billion PLN. The tax rate is 0.42% of the amount exceeding the minimum value threshold. However, taxpayers will be allowed to deduct the expense from the CIT tax.

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.