Entrepreneurs: Fiscal System in Poland Complicated and Unfair

Związek Przedsiębiorców i Pracodawców (Entrepreneurs and Employers’ Union) ordered a research into the business owners’ views on taxation in Poland. The study, conducted by researchers from Warsaw University, is to give highlight of what the fiscal system is like for those generating income and employing staff and how they view various taxation systems and solutions.

The entrepreneurs who participated in the survey were almost unanimous: Poland’s fiscal system is complicated, unjust, and unclear. 92% of the survey takers expressed an opinion that taxation in Poland should be simplified. Only 18% of the participants believe the present system is clear to understand.

The researchers also tried to learn what business owners in Poland this about various fiscal solutions. 41% of the respondents chose the linear system as the best option. In the linear taxation method, everyone is subject to the same tax rate, regardless of the level of accrued income. 17% of the respondents were in favour of the progressive method, with increasing tax rates. The third option, which was found attractive by only 9% of the respondents, was capitation tax. 33% of the respondents chose the option “it’s difficult to say”.

Entrepreneurs were also asked to say what would be their reaction if the current system was replaced with a new levy imposed on sales and a 25% tax on the payroll fund. Both options were met with positive reaction: over 80 percent of the respondents see them as better than the current fiscal solutions. However, there was one solution that employers were found not to be so much in favour of: employers doing the taxes for their employees.

In April, Polish Deputy Prime Minister and Minister of Finance and Development Mateusz Morawiecki informed the media that the government has no intention to tinker with the fiscal system in Poland. “For the economy, for the entrepreneurs, for the people, what is important is stability” – he said.  What is likely to change is the tax-free amount.

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.