Standard & Poor’s upgrades Poland’s rating

Rating agency Standard & Poor’s upgraded their credit ranking of Poland from BBB+ to A- (long-term foreign currency rating) and A/A-1 (long- and short-term local currency rating) with a stable outlook. The agency noted the country’s strong GDP growth and budgetary outcomes. The upgrade came earlier than expected and took many economy experts by (a pleasant) surprise. As the agency’s report’s authors remarked, “The upgrade reflects solid achievements in the form of economic growth and fiscal prudence.”

Polish Prime Minister Mateusz Morawiecki and his cabinet are pleased with the decision of the American financial services company. “It is a sign that we are going in a good direction”, said the head of the government. The Minister of Finance Teresa Czerwińska said that Standard & Poor recognized the government’s efforts in the area of fiscal policy. She stressed that Poland is currently experiencing higher-than-expected economic growth and than expected budget deficit.

The decision is a step back from a downgrade of Poland’s rating to BBB+ that took place two and a half years ago. At that time, experts from Standard & Poor were concerned about the policy of the new Polish government and the friction between Poland and the EU. Today, they see the effects of strict fiscal policy the aim of which was to restrict tax evasion and increase budget revenue from VAT and other taxes. Experts also note that heavy social spending initiated by the parliament did not destabilize the budget.

In April 2018, the agency changed the country’s rating outlook from stable to positive. This was a sign that Standard & Poor may reconsider its evaluation and put Poland’s rating back in the top category. In the recent few months, the country’s GDP growth kept growing and unemployment stayed at record-low levels. Moreover, the government prepared a pension scheme reform to counteract negative demographic trends.

Other big global rating agencies, Fitch and Moody’s kept Poland’s rating at the same level.

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.