Subsidies for heater replacement in Kraków

The latest incidents of smog that Poles experienced in the majority of Polish cities reignited a heated debate on air pollution. Last week, the problem grew to such an extent that Prime Minister Beata Szydło announced the issue of smog will be debated by the Economic Committee of the Council of Ministers chaired by Deputy Prime Minister Mateusz Morawiecki.

The main problem indicated during the discussion on improving air quality is the issue of what Poles burn in their heating units. As Adam Ruciński, the president of BTGF consulting firm notes, the problem is not what we burn but also in what we burn it. He stresses the fact that the most important thing is investment in new technology. Still, he remarks that introducing new technology entails substantial costs. As early as 2016, Ruciński suggested using economic incentives for citizens – subsidies or tax credits. Marek Lewandowski from NSZZ “Solidarność” National Committee confirms Ruciński’s theory, and he refers to the situation in Czech Republic to argue in favour of the need to implement new technology – after introducing a ban on certain types of heating units and types of fuel, you could observe positive results of the policy.

During 2016, as an attempt to solve the problem, subsidies within the Programme of Limiting Low Emission were introduced. The programme brought good effects – last year, thanks to 63 million PLN of subsidies, the inhabitants of Kraków removed 4,200 coal-fired heating units and boilers. There are more replacements planned this year – there were granted 770 thousand of subsidies in the amount of 16.5 million PLN. During an interview with Polish Press Agency, Witold Śmiałek, the advisor on air quality of the president of Kraków, stated that provided the pace of heater unit replacement remains stable, you will be able to see diminishing concentration of annual pollutants recorded by meter stations as soon as 2018. Apart from that, Kraków fosters new clear air technologies. Smogathon – an event that attracts people with ideas and companies with technologies to fight air pollution takes place over there every year.

Pursuant to a regulation of the Ministry of Development, from 2018 in Poland it will be only possible to set up solid fuel boilers with the highest, fifth class emission parameters.  The remaining problem is the appliences already set up.

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.