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Corporate Income Tax (CIT)


The 19-per cent corporate income tax is the basic corporate income tax. As a rule, the provisions of EU directives have been implemented into the Polish taxation system.

CIT rate


CIT rate for small taxpayers and taxpayers starting their activity
- in the tax year of starting their activity

Withholding tax:





licence fees


intangible services


CIT on commercial real estate


Corporate income tax payers include:

  • limited liability companies, joint-stock companies and other legal entities;
  • corporations in formation;
  • limited joint-stock partnerships having its registered office or management board in territory of the Republic of Poland;
  • companies without legal personality having its registered office or management board in another state, if pursuant to the tax laws of another country are treated as legal entities and are subject to taxation in that state on their total income regardless of where it is earned;
  • organisational units without legal personality except for civil partnerships, general partnerships, professional partnerships and limited partnerships.
  • tax capital groups.

Partnerships (excluding limited join-stock partnerships) are not subject to CIT. Income earned by partnerships is allocated to the partners and subject to CIT at their level, together with other earnings.

Taxpayers with offices or management boards in Poland are subject to CIT in Poland on their total income. Taxpayers who do not have offices or management boards in Poland are subject to CIT only on income earned in Poland.

Comparison of taxation on different types of activity (branch/company):




19 %

19 %

Profit distribution

No tax on branch profit distribution.

19% WHT, with the option of an exemption or lower rate.

Rules of taxation

It is important to accurately allocate revenues and costs to the branch's activity, which in practice may cause problems due to the absence of detailed provisions.

The company is a separate taxpayer subject to CIT in accordance with general principles.

Introducing separate accounting



Other comments

Possibility of deducting the CIT paid in Poland in the home country of the holding company. Some treaties provide for an exemption on income taxed in Poland.

Possibility of deducting WHT paid in Poland. In the case of a parent company with its registered office in the European Union, it is typically possible for dividends to be exempt.

The Taxable base
is the sum of income earned from capital gains and income derived from other sources of revenues. In certain cases, revenue may be the taxable base.

Sources of revenues under CIT Act:

  • capital gains - dividends, other revenues actually derived from participation in profits of legal persons and a limited joint stock person, the value of property received as a result of the liquidation of a legal entity or a limited joint stock person, revenues from the sale of shares of companies, revenues from the sale of receivables previously acquired by the taxpayer, revenues from property rights such as copyrights or related property rights, licenses, trademarks and know-how, revenue from securities, derivative financial instruments;
  • other revenues, including revenues derived from operating activities - other revenues, including revenues derived from the sales of goods and services, etc.

Income from the source of revenues is the surplus of the sum of revenues obtained from this source of revenues over the costs of obtaining them, generated in the tax year. Should the costs exceed the sum of revenues, the difference is a loss from the source of revenues.

Tax Loss

  • may be deducted from income deriving from the given source of revenue during five subsequent tax years (“loss carry-forward system”); the deduction in a single year cannot exceed 50 per cent of the value of the loss;
  • the following losses are not taken into account: losses of business subject to transformation, merger, acquisition or division - in the event of a transformation of the legal form, a business merger or a division, with the exception of a transformation of a company which is a taxpayer of CIT into another company which will be a taxpayer of CIT.


Profit distribution

Dividends disbursed by corporations with offices in Poland are subject to withholding tax at the 19-per cent rate, (the tax is collected by the company making the disbursement). Dividends disbursed between Polish companies, are not further subject to CIT at the shareholder level.

Tax treaties stipulate a lower withholding rate for dividends (5%, 10% and 15%) if certain conditions are met (inter alia, the company disbursing the dividend should hold the shareholder’s tax residency certificate).

There is possibility of exempting dividends from tax, when entity receiving income (revenue) from dividends, as well as other revenues qualified as dividends, is a company which is subject to taxation on the entire of its income in the Republic of Poland or in a European Union member state other than the Republic of Poland, or the Swiss Confederation or in another state of the European Economic Area, regardless of where it is earned.

The condition of the exemption is continuous, two-year holding period by the company receiving the dividends required 10% (in the case of Swiss - 25%) of shares in the capital of the company paying the charge. The prerequisite is also met, if this period has elapsed after the date of receiving the dividend.

Exemptions and deductions shall apply on condition that legal grounds exist, whether resulting from an agreement for the avoidance of double taxation or a different ratified international treaty to which the Republic of Poland is party, for the tax authority to receive tax information from a tax authority in the state where the registered office of the taxpayer is located or where the income was earned.

An entity interested to make use of this exemption should submit:

  • a current certificate of tax residence or a document of the existence of a foreign permanent establishment, the obligation to submit a current certificate of residence does not apply to companies resident in Polish territory;
  • written statement of not being benefit from exemption from income tax on the entire income, regardless of where it is earned.

The definition of dividend also applies to income earned, among other cases, on a mandatory or automatic redemption of shares or a company liquidation.


Tax on foreign earnings

Income earned by a Polish taxpayer from sources located abroad is subject to 19-per cent CIT and should be cumulated with income earned in Poland unless the tax treaty states otherwise. The tax paid abroad may be deducted from Polish CIT, but the deduction cannot exceed the amount of CIT due under Polish legislation (for the part classified as foreign income).

Dividends obtained from foreign sources may be exempt from CIT in Poland:

  • if they are disbursed by companies with offices in an EU or EEA state or in Switzerland
  • and the Polish company has held at least 10 per cent (or 25 per cent for companies with their registered office in Switzerland) of the shares in the company disbursing the dividends for at least two years.

The 2 year period may also elapse after the dividend disbursement date.

The company disbursing and the company collecting the dividend must be subject to CIT on their total income in Poland and in the EU/EEA state or in Switzerland. Income on the liquidation of foreign legal entities is not eligible for exemption.

Dividends obtained from companies with offices in a state with which Poland has concluded a tax treaty (other than EU/EEA states or Switzerland) are subject to 19-per cent CIT. However, withholding tax paid abroad and, if other specific conditions are met, foreign CIT paid by a foreign subsidiary, can be deducted from Polish CIT (underlying tax credit). The deduction cannot exceed the CIT amount due under Polish law.


Little anti-abuse clause

The exemption from income tax on dividends and other revenues from participation in profits of legal persons does not apply if:

  • income is generated as result of transactions or activities the main purpose or one of the main purposes of which was to obtain tax exemption and
  • these activities do not have a real character (they are not performed for justified economic reasons).

In particular, this applies when the ownership of the shares of a company paying the dividend is transferred or the company generates revenues (income) then paid in the form of dividends or other revenues from participation in profits of legal persons.


CFC (Controlled Foreign Corporation)

Polish entities are liable to 19% income tax on the profits earned by their controlled foreign companies (CFC).

A CFC is defined as:

  • a foreign company having residence in a tax heaven or
  • a foreign company having residence in a state, with whom the Republic of Poland or European Union has not concluded the international treaty on the exchange of tax information or
  • a foreign company:
    • in which a Polish company alone or with other related entities has held;
    • continuously for at least 30 days, directly or indirectly, over 50% of shares in the capital or over 50% of voting rights in controlling bodies or decision-making bodies, or over 50% of shares with the right to participate in profits vested in them;
    • in which at least 33% of the company's revenues generated in the tax year is derived from passive income (dividends and other revenues from participation in profits of legal persons, from the disposal of shares, claims, interest, copyright, sureties and guarantees, the disposal and exercise of rights from financial instruments, as well as from transactions with related entities) if the company does not generate added value- in relation to these transactions in economic terms or this value is negligible;
    • in which the tax paid is lower than the difference between the CIT which would be paid in Poland and the tax actually paid.)

A Polish company that controls a CFC is obligated to:

  • maintain a register of controlled foreign corporations;
  • keep records of economic events in CFC;
  • submit CFC tax return and pay a tax on CFC income.

among other things.

The CFC taxation regime does not apply to entities if they carry out actual economic activity (mainly relates to UE entities).


Capital gains

Earnings from the sale of shares and other securities are subject to 19-per cent CIT in accordance with general principles. A tax loss in this respect may be deducted from the revenues from this source in subsequent five tax years.

As a rule (in accordance with tax treaties) - sales of shares/securities by foreign entities are subject to taxation in the country where the seller has its registered office. Exceptions may apply if the sale concerns shares in a company whose assets comprise primarily properties located in Poland- in such a case, the profits may also be subject to taxation in Poland (the so-called “property clause”).

As a rule, a sale of shares/securities is subject to a 1-per cent tax on civil law transactions on the market value of the instruments sold, unless it is conducted through a brokerage house. The acquiring party is the taxpayer with respect to the tax on civil law transactions.


Real estate

Earnings from the sale of real estate are subject to 19-per cent CIT in accordance with general principles (income from other sources of revenues).

CIT on commercial real estate

This tax covers commercial real estate classified according to the Classification of Fixed Assets as office facilities, shopping centres, department stores, independent stores and boutiques, and other commercial and service facilities with the initial value exceeding PLN 10 million.

Taxation with this tax does not apply to fixed assets where the depreciation write-offs with regard there have ceased as a result of the suspension / cessation of business operations, nor does it apply to office buildings used solely or mainly for taxpayer’s own needs.

The taxable base is the revenues corresponding to the initial value of the fixed asset determined on the first day of each month resulting from the records maintained less the amount of PLN 10 million.

The tax amounts to 0.035% of the taxable base for each month. It is calculated and paid for each month by the 20th day of the following month. It is deducted from CIT advance payments and annual CIT.

Real estate clause

Income from the sale of shares, all rights and obligations in partnerships, shares in investment funds as well as receivables being a consequence of holding shares in these entities if at least 50% of the value of assets of these entities comes from real properties located in Poland is taxable in Poland at 19%.


Restructuring efforts

Poland has implemented the directive on a common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States. Mergers, divisions and exchanges of shares concerning companies with seats in the EU may be CIT-neutral, provided that certain requirements are met (a specific degree of capital ties).

Restructuring is often conducted using partnerships or closed-end investment funds, because of its effect of consolidating performance and reducing or eliminating CIT.

Restructuring could be tax neutral provided that the transaction is performed with economic reasons. The taxpayer is obliged to prove the economic reasons of the transaction otherwise it is presumed that the transaction was performed in order to avoid the taxation.


Withholding tax

Withholding tax applies to income disbursed in Poland resulting from share in the profits of legal entities, interest, license fees and remuneration for some intangible services.

As a rule, the rate of withholding tax on dividends is 19 per cent, but tax treaties may stipulate a lower rate (5, 10 or 15 per cent).

CIT exemption in Poland are possible: see “Distribution of profits” and “Tax on foreign earnings”: (above).

Interest and license fees are subject to 20-per cent withholding tax in Poland, but tax treaties may stipulate a lower rate (5, 10 or 15 per cent). Some tax treaties also stipulate a 0-per cent rate on interest (e.g. those with Sweden, the United States or France).

Interest and license fees are exempt from withholding tax in Poland if they are disbursed by a corporation with its registered office in Poland to a company with its registered office in an EU/EEA state other than Poland or in Switzerland, and if:

  1. the company disbursing the interest/license fees holds a minimum of 25 per cent of the shares in the capital of the company collecting the interest/licence fees; or
  2. the company collecting the interest/license fees holds a minimum of 25 per cent of the shares in the capital of the company disbursing the interest/licence fees; or
  3. the company subject to taxation on its total income in an EU/EEA state holds at least 25 per cent of the shares in the capital of the disbursing company and in the capital of the company collecting the interest/license fees; and
  4. a minimum 25 per cent share has been held directly and continuously for at least two years - this requirement does not need to be met at the time of the disbursement of the above fees/interest.

The application of exemption is depends on whether the Polish company has the recipient’s tax residency certificate and a statement that the recipient or the company referred to in c) is subject to CIT on its total income in its country of residence, regardless of where the income is earned, and is not taking advantage of an exemption from CIT on its total income regardless of source.

Payments for intangible services, such as advisory services, advertising, data processing, etc. are subject to 20-per cent withholding tax unless otherwise stated by tax treaties (treaties concluded between Poland as a rule do not provide for withholding tax on payments for intangible services).

The 20 per cent withholding tax exemption in Poland is conditional upon the disbursing entity holding the recipient’s tax residency certificate.


Tax-deductible costs and depreciation

Tax-deductible costs are costs incurred to earn or maintain or secure a source of revenue that are not excluded by statute from the tax-deductible cost category. Taxpayers must document the costs incurred. Tax costs also include expenditures for discontinued investments. The legislation contains a list of more than 60 items that are not regarded as costs for tax purposes. These include, inter alia, accrued but unpaid interest, business entertainment costs (i.e. essentially costs of meeting contractors), administrative penalties and interest on overdue statutory payments, as a rule provisions established in accordance with accounting principles, car wear and tear allowances or car insurance premiums in the portion of the car value that exceeds the equivalent of EUR 20,000. Expenditures for the purchase of fixed assets and intangible assets do not constitute costs either, but depreciation write-downs made in accordance with applicable laws.

As of 2012, an expenditure may not be considered to be a tax cost (including depreciation write-down) if the cost invoice was not settled within deadlines as prescribed by the tax legislation (60 and 90 days), regardless of the payment due date stemming from the contractor agreement. The foregoing limitations are expected to be abolished as of 2016.


As a rule, the tax cost related to interest can be deductible at the time of its payment (cash method) - other than for accounting purposes where the rule is to allocate interest to costs at the time of accrual (accrual method). Exceptions include interest accrued until the date of handover of an asset for use.

Exchange rate differences

may be accounted for at the time they are incurred (tax method) or at the time of their accrual (accounting method). If the accounting method is selected, it applies for at least three tax years. Exceptions include exchange rate differences accrued until the date of handover of an asset for use.



As a rule, depreciation write-downs are based on the cost of acquisition or manufacturing of the depreciated asset. The legislation stipulates the following depreciation methods:

  • linear method (as a rule);
  • Reducing balance depreciation method - means higher costs in the initial depreciation period (applicable to some components: boilers and power generation machinery, basic and specialised machinery, devices and equipment, technical devices, movables and equipment and vehicles other than cars);
  • one-off depreciation (for assets under PLN 10,000);
  • custom rates (applicable to used or improved fixed assets, for example a non-residential building in use for more than five years may be depreciated over forty years minus the full number of years elapsed from the date of its initial handover for use until the date of entering it in the fixed asset and intangible asset register kept by the taxpayer, but the depreciation period cannot be shorter than ten years).

Entrepreneurs who in a given tax year launched economic activity and small taxpayers, can make use of the privilege, which is a one-time depreciation. As part of the relief entrepreneurs can make write-offs up to EUR 50 000 in a given tax year.

For assets depreciated using the linear method, the rate may be decreased in a given tax year by no more than the rate prescribed by tax legislation.

In the case of a transformation, division, merger, in-kind contribution including a business or its organised part, buyers of fixed assets and intangible assets must carry on using the depreciation methods applied by the seller.

Depreciation does not apply to:

  • the land and right of perpetual usufruct of land;
  • expenditure incurred on their acquisition constitute tax deductible cost at the time of non-free of charge disposal (sale).

Depreciation rates and periods for tax purposes may differ from depreciation for accounting purposes.

Examples of depreciation rates and methods for selected assets

Linear method

Reducing balance method

Type of fixed asset

Depreciation period

Annual depreciation rate (%)

Depreciation period

Annual depreciation rate (%)

Car - PLN 50,000

60 months

20% (PLN 10,000)


Truck - PLN 100,000

60 months

20% (PLN 20,000)

30 months

40% (PLN 40,000 in the first year)

Computer - PLN 5,000

3 years

30% (PLN 1,500)

18 months

60% (PLN 3,000 in the first year)

Construction equipment - PLN 1,000,000

60 months

20% (PLN 200,000)

30 months

40% (PLN 400,000 in the first year)

Office building - PLN 10,000,000

40 years

2.5% (PLN 250,000)




Income from leases is subject to 19-per cent CIT in accordance with general principles. Tax laws set out in detail two types of leases: operating leases and financial leases. Leased objects may include fixed assets, intangible assets and land (or the right of perpetual usufruct of land). Lease settlement for tax purposes may be different than for accounting purposes.

For both types of leases, upon contract termination, ownership may be transferred to the beneficiary. Since it is possible to enter the entire lease payment under tax costs, operating leases may be more favourable in terms of tax.

Major differences between operating leases and financial leases:

Operating leases

Financial leases

Lease payments

Lease payments, in their entirety, are a cost for the beneficiary and revenue for the financing party.

Lease payments are a cost for the beneficiary and revenue for the financing party only in the interest portion.


The financing party effects depreciation.

The beneficiary effects depreciation.


At least 40 per cent of the statutory depreciation period (or at least 5 years for real properties).

Fixed term - no minimum or maximum.


The limit of expenses on intangible services from related entities

It is not possible to include in tax deductible costs expenses related to:

  • consulting services, market research, advertising services, management and audit, data processing, insurance, guarantees and sureties, and performances of a similar nature;
  • all kinds of fees and charges for the use or right to use the rights or values such as: copyright or related property rights, licenses, trademarks and know-how;
  • transfer of the debtor's insolvency risk due to loans other than those granted by banks and SKOK Credit Unions, including liabilities under derivative financial instruments and similar performances;

purchased from related parties or entities from tax havens.

Costs incurred directly or indirectly for related parties or entities from the so-called tax havens are excluded from tax deductible costs where these costs in total exceed 5% of the amount corresponding to tax EBITDA in the tax year.

Tax EBITDA = (tax revenues - interest revenues) - (tax deductible costs - depreciation write-offs - interest).

This restriction applies to the surplus of the costs indicated in this provision in excess of PLN 3 million in the tax year. The limit of recognizing expenses as tax deductible costs = (5% * TAX EBITDA) + PLN 3 million.

The amount of the cost of intangible services not deducted in a given tax year is deductible over the next 5 tax years, in accordance with the rules and within the limits applicable under the law in a given year.

The limit of costs for intangible services does NOT apply to:

  • costs of services, licenses and fees paid to non-related parties;
  • (with the exception of non-related parties with the seats or management in so-called tax havens);
  • insurance services, guarantees and sureties provided by professional entities;
  • costs of services, fees and receivables classified as tax-deductible costs directly related to the creation or purchase of goods or provision of services;
  • costs re-invoiced by the taxpayer.


Research and development operations

A taxpayer obtaining earnings income other than revenues from capital gains has the right to deduct the costs involved in obtaining the revenues incurred for the purpose of research and development activities referred to as “eligible costs” from the taxable base.

The eligible costs are listed in the CIT Act and include, inter alia, materials and raw materials directly related to research and development operations, acquisition of specialized equipment, costs of expert opinions, consultancy services, labour costs, etc.

The deduction amount may not exceed the amount of income obtained by the taxpayer from revenues other than revenues from capital gains during the tax year.


Thin capitalisation

As of 1 January  2018, a significant change has been implemented in the regulations regarding the so-called thin capitalization.

The costs of debt financing are excluded from the tax deductible costs in the part where the surplus of debt financing costs exceeds 30% of the tax EBITDA.

Tax EBITDA = (tax revenues - interest revenues) - (tax deductible costs - costs of debt financing not included in the initial value of the Fixed Asset or Intangible Assets - depreciation write-offs).

EBIDA is the surplus of revenues from all sources of revenues less interest revenues over the sum of tax deductible costs less the value of depreciation write-offs and costs of debt financing included in tax deductible costs and not included in the initial value of fixed assets or intangible assets.

The surplus of debt financing is the amount by which the costs of debt financing incurred by the taxpayer, included in the tax deductible costs in the tax year, exceed the taxable interest revenues generated by the taxpayer in that tax year.

The costs of debt financing are all kinds of costs related to obtaining from other entities, including non-related parties, any funds and the use of these funds, in particular interest, including capitalized or included in the initial value of fixed assets or intangible assets, fees, commissions, bonuses, interest part of the lease instalments, penalties and fees for delay in payment of liabilities and costs of securing liabilities, including costs of derivatives, regardless of who they were incurred for.

Interest revenues is interest revenues, including capitalized interest, as well as any other revenues being economic equivalent of the interest that correspond to the costs of debt financing.

The limit does not apply to the surplus of debt financing costs where it does not exceed PLN 3 million in the tax year.

Limit for the inclusion of interest in tax deductible costs = (30% * TAX EBITDA) + PLN 3 million

The costs of debt financing excluded in the tax year from tax-deductible costs under the thin capitalization regulations are included in the tax deductible costs over the next 5 tax years, in accordance with the rules and within the limits applicable under the regulations in a given year.

As a rule, loan agreements are subject to 2-per cent tax on civil law transactions.

Examples of civil law transaction tax exemptions for loans

  • loans extended to a corporation by its (shareholders);
  • loans extended by foreign companies conducting lending activity;
  • loans that are eligible for VAT exemptions (as financial intermediation services).


Tax capital groups (PGK)

It is possible to consolidate results for tax purposes within a PGK. However, due to the stringent requirements of the applicable laws, capital groups are not a popular means of consolidation for tax purposes in Poland.

Some of the requirements for establishing a capital group are as follows:

  • having a registered office (for companies that belong to a group in Poland);
  • average capital of each group company of no less than PLN 500,000 (approximately EUR 125,000; assuming that 1 EUR = 4 PLN);
  • minimum share in subsidiaries by the parent company - 75 per cent;
  • not taking advantage by group companies of income tax exemptions under other acts (the use of an exemption due to activity conducted within a SEZ - does not preclude from establishing a PGK);
  • minimum share of income in the revenue of the tax group - 2 per cent;
  • specific requirements regarding the form and wording of the agreement;
  • minimum term of the agreement - 3 years;
  • no option to expand the agreement to include other companies (and other restrictions).


Conducting business via partnerships (excluding joint stock limited partnership) may be an alternative to tax capital groups. Income earned by partnerships is allocated to the partners and subject to CIT at the partner level, together with their other earnings. There are no additional administrative requirements such as those applicable to tax capital groups.


Tax exemptions and credits

Legislation provides for a number of CIT exemptions, both subjective and objective. For instance, investment funds, pension funds, public service organisations, church organisations and special economic zone companies are exempt from tax upon meeting appropriate requirements. Furthermore, CIT does not apply to agricultural business, with the exception of income from special departments of agricultural production.


The income of Polish investment funds is exempt from CIT, except for income on lease of certain commercial real estate. Foreign investment funds may also be exempt from CIT, provided that they meet the conditions specified in the CIT Act.

Special Economic Zones (SEZs)

SEZs will apply in Poland until the end of 2026.

Companies operating in SEZs may typically be exempt from CIT. The rate of exemption depends on the region/province, and currently ranges from 15 per cent to 50 per cent of:

  • investment costs incurred during the completion of an investment in the SEZ, or
  • the sum of two-year employment costs for newly-created jobs.

A CIT exemption is available if the taxpayer:

  • obtains a business permit for activity in the SEZ;
  • the activity must be performed on the basis and in the frame of the permit;
  • the value of tax exemption cannot exceed the value of public aid predicted for the individual areas of qualified for the public aid (regulated by separate provisions).

As a rule, SEZ business permits are issued for manufacturing activity. However, in most SEZs, it is also possible to provide the following services: accounting, other than tax returns, bookkeeping, call centres, IT services, technical surveys and analyses, research services.

Companies operating in SEZs may also take advantage of property tax exemptions.


Returns/filing requirements

As a rule, the tax year covers twelve consecutive months, but in the course of business, taxpayers may modify the tax year pattern adopted.

Returns/CIT withholdings

No requirement to file returns. CIT withholdings must be paid by the 20th of every month.

Annual tax return CIT-8 is filed in an electronic form by the end of the third month after the end of each tax year. The CIT set forth in the annual return must also be paid by the above deadline.



Last update: July 2018

Prepared for the Polish Information and Foreign Investment Agency by:

MDDP - Tax Advice Company

Polish Investment and Trade Agency

Krucza St. 50

00-025 Warsaw

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