Exit Tax in Poland to be Introduced Next Year

The officials from the Ministry of Finance publicly confirmed that government experts are making plans to introduce a corporate exit tax in Poland. It is not a theoretical concept – the work is already underway.

The exit tax is directed at corporations moving their premises abroad. The purpose is to safeguard the interests of the state that oftentimes offers generous fiscal incentives to foreign investors.

The Importance of Exit Tax in Poland:

Even though the government (or local government) gets lower tax revenue, in the long run, they reap the benefits of the presence of a big company in the local area, such as a positive impulse to the job market.

However, if the investor quickly moves out of the location, providing incentives does not really have the expected effect. Therefore, the a need to tax the entrepreneur who moves out to a different country.

What will be subject to taxation? Unrealized capital gains related to transferring taxpayer’s enterprise’s / permanent establishment’s / tax residency to another country. The state wants to have the right to impose a tax on the income that was generated while the entity was present in Poland and was under the country’s tax jurisdiction.

Entrepreneurs who have already made plans to move their premises to another country need to do this by the end of the year. Otherwise, they will be obliged to pay the new duty, as the Ministry of Finance expects the new fiscal regulation to come into effect at the beginning of 2019.

Polish government officials have not decided to work on the changes to the fiscal law on their own initiative. In fact, it was the European Commission that obliged all EU member states to introduce such solutions through Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market.

Interestingly, there is a talk of imposing the new fiscal obligation also on individuals changing their tax residency.

A draft version of the legal act introducing exit tax in Poland has not been made available to the public yet.

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.