Ministry of Finance wants to lower taxes for small enterprises

Ministry of Finance prepared a draft act on lowering the rate of corporate income tax for small enterprises. Thanks to this, around 90% of corporate taxpayers will be able to capitalize on the reduced 15% corporate income tax rate.

According to the proposed solutions, the reduced corporate income tax rate will apply to taxpayers whose profit on sales together with the output goods and services tax did not exceed the equivalent of 5 million PLN in the previous year. This will also concern the taxpayers starting their businesses.

The changes are to back up the taxpayers for whom difficulties in raising capital for new investments and fierce competition is a considerable handicap for running or developing a business. The Ministry of Finance’s strategy is aiming at building advantageous environment for company growth.

In the long-term perspective, the initiative should have positive effect on enhancing the development and creating favourable conditions for boosting entrepreneurship in Poland as well as entrepreneurship among young people.

In the draft act it has also been proposed to eliminate the interpretative doubts that may result in tax avoidance with respect to some profits. Among other things, this is about changing the rule of determining revenue on taking up shares in a company in return for a contribution in-kind in form other than a company or its organized part. In this way the possibility of “artificially” generating losses will be eliminated.

Facilitation and tightening are the rules the Ministry will stick to when designing the new tax law. That is why along with cutting tax rates for newly founded companies, tax loopholes allowing money to escape are closed.

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.