Company Income Tax in Poland

Company Income Tax in Poland is paid by legal persons as well as organisational units without legal personality, limited joint-stock partnerships and tax capital groups. The levy applies to the taxpayers who have their seat (registered office) in the territory of the Republic of Poland. This means CIT applies to limited liability companies and joint-stock companies registered in Poland.

There are some entities that are exempt from the obligation to pay company income tax. These are the National Bank of Poland and government units.

The tax is calculated at the rate of 19%. However, recent amendments to tax regulations brought some changes to the CIT tax. The new company income tax rate from 2017 is going to fall to 15%. Unfortunately, the amendment will affect only the small taxpayers, i.e. the businesses whose sales revenue do not exceed 1,2 million euro in the preceding tax year.

Taxpayers in Poland are under obligation to make advance tax payments on a monthly basis. Once a tax year is over, companies need to provide a declaration on their income or loss and pay applicable difference between the due tax amount and the amount of advance tax payments that they had already made.

Polish tax law has also provisions for those who do not make profit in a given financial year, i.e. they end up with a tax loss. If your costs exceed your revenue, you have five years for deducting the tax loss from your income. However, you may not deduct more than half of your loss in a single year.

Polish companies are also subject to the dividend tax at the rate of 19%. Another levy to consider is tax on civil law transactions at the rate of 1%. It applies, among other things, to share sale transactions. Remember about it the next time you will be making plans to invest in Poland.

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.