Doing Business in Poland

2023

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Contents

Introduction 5

Why Invest in Poland? 7

Legal forms of conducting business in Poland 9

HR and employment law 13

Taxation 16

Overview 16

Quick rates and dates 17

Corporate Income Tax 18

Corporate tax compliance obligations 22

Corporate – tax credits and incentives 26

Individual – Taxes on personal income 31

Value Added Tax 33

Accounting and audit 36

Who we are 38

Contacts and links 42

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 Introduction

Dear Investors,
I am delighted to present to you the next edition of our “Doing Business
in Poland” guide. As the new Managing Partner of PwC, I firmly believe
that Poland presents a unique and compelling opportunity for
investments.
Over the years, my country has developed into one of the fastest-
growing economies in Europe. With a population of over 38 million
people, Poland has a skilled workforce and a thriving business
environment. These factors have contributed to the country's rapid
growth, making it an attractive destination for foreign investors. Poland
has a diverse economy that offers a range of investment opportunities
across various sectors, including technology, finance, consumer
markets, manufacturing, real estate and energy. Our strategic location in
the heart of Europe, along with its well-developed infrastructure, also
makes it an ideal gateway to the wider European market.
As the world faces unprecedented challenges, it is essential to invest in
stable and predictable economies. Poland is precisely one of them. As a
member of both NATO and the EU, we are a reliable and strategic
partner for businesses looking to invest in Europe.
As a leading professional services firm in Poland, PwC is uniquely
positioned to help investors navigate the country's business landscape.
Our team of experienced professionals can provide comprehensive
support and guidance on issues such as tax, legal, and regulatory
compliance. We can also help businesses identify potential investment
opportunities and conduct due diligence on potential partners. We are
always here to help you!
Best regards
Michał Mastalerz
CEO of PwC Poland

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Why invest in Poland?

Labor market SSC sector

Despite the growing inflation, which currently Currently, over 400,000 people are employed in
affects not only Europe, but is a global the SSC sector. Taking into account the trends in
phenomenon, the level of remuneration in Poland the global economy, it is expected that
compared to the largest metropolises of Western employment in the business services sector in
and Northern Europe and the USA is still very Poland in 2023 will increase by at least another
competitive. Lower wages and, at the same time, 30,000 people.
access to highly qualified employees mean that
The increase in investments in Poland in the SSC
Poland invariably remains among the leaders
industry is particularly visible in the IT services
strongly attracting companies from the SSC
sector. In 2020, many companies withheld
sector, because foreign investors are still guided
investment decisions, waiting for a more stable
by these two factors when choosing a location.
situation on the market, but the IT industry quickly
Polish universities educating staff from the unfrozen its budgets. In addition, many companies
financial, IT and administrative sectors at the with branches in Ukraine or Belarus have decided
highest level are open to cooperation with to move their employees to Poland and open
business and become a breeding ground for branches in the largest cities in Poland.
talents for companies from the SSC area. It is
Moreover, Poles are still very open to changing
worth creating prospects for candidates already at
jobs. The increase in the number of employees in
the stage of studies by organizing paid internship
the SSC area reflects the opportunity for a better
programs and cooperating with universities as part
job, defined by earnings, professional
of practical classes organized at the university.
development, better employment conditions and a
What's more, the number of students in Poland better working environment. Poland is still at the
has slightly increased - according to Central forefront of European countries when it comes to
Statistical Office data, more than 1.2 million people new investments in the sector of modern business
study at universities, this increase has been services. Recent events: the pandemic and the
observed for the first time since 2006. The most armed conflict in Ukraine have clearly shown that
frequently chosen majors from the subgroup are: this sector is resistant to various types of
business and administration whose graduates turbulence and uncertainty on the labor market. A
often find employment in the SSC sector, and huge advantage is the size of the SSC, the
engineering and technology, this group of maturity of the industry and the ability to adapt to
students, in turn, is a young talent after which is new conditions.
more and more often used by companies from the
IT and R&D industries. Access to such a pool of
candidates enables the SSC/BPO sector to adapt
faster and more efficiently to the challenges
brought by the current dynamic labor market.

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R&D That is why another reason why launching an R&D
center in Poland is a good idea is human
Research and development centers in Poland can resources. Well, our country is an excellent source
count on numerous exemptions from taxes (e.g. on of qualified and committed Polish specialists. It is
real estate, agricultural or forestry), as well as a worth remembering, however, that this is one of
number of subsidies and the possibility of the easiest ways to acquire talents appreciated all
participating in other aid programs. An important over the world - such as those from Ukraine.
advantage of conducting this type of activity in Having such a status also opens the door to
Poland is also the possibility of deducting up to cooperation with numerous companies for R&D
150% of tax deductible costs. This translates into centers. These types of units enjoy respect and
significant savings resulting from tax liabilities. interest among others. industries such as medicine
Research units may also gain access to additional and pharmacy, engineering, energy, as well as the
financial support, which enables research and broadly understood production area.
development work. Although the unfavorable ratio
of the value of the Polish zloty to foreign
currencies is not the best prognosis for local
entrepreneurs who operate and work mainly for
Polish customers, the opposite is true for foreign
companies. Technological development requires
money, but above all people who have vision,
skills and a constant hunger for knowledge.

Warehouse real estate market

Despite geopolitical and economic challenges, the
forecasts for the near future are optimistic. The
long-term development of the market should be
supported by factors such as nearshoring and last-
mile logistics. The further growth of the e-
commerce industry will also be crucial for the
Polish warehouse sector. 1/3 of the warehouse
space in Poland is dedicated to online commerce.
Already in 2023, Poland will join the group of the
four largest warehouse markets in Europe, whose
stock exceeds 30 million sq m, i.e. Great Britain,
Germany, France and the Netherlands. In Poland,
there is potential to create additional several
million square meters in the next 10 years

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Legal forms of conducting
business in Poland

There are several ways to operate a business in Poland through a legal entity. The
most common types for investors with foreign capital are

a limited liability company

(Polish: spółka z ograniczoną odpowiedzialnością)

and a branch office of foreign entrepreneur.

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 Limited liability company

• Under Polish law a limited liability company is a • The share capital of a limited liability company
separate legal person which means that it has shall amount to no less than PLN 5,000, being
its own assets and operates through its an equivalent of approx. EUR 1,250. The share
governing bodies. capital of a limited liability company may be
covered in whole or in part with cash and/or in-
• The shareholders are not liable for the
kind contributions.
company’s obligations and their financial risk is
limited only to the amount invested in the • The Articles of Association must include i.a. the
company’s share capital. business name, corporate seat and objects of
the limited liability company. The business
• In principle, there are two obligatory statutory
name of the LLC must be unique to the extent
governing bodies of a company:
that it does not cause confusion with the names
(i) a management board and (ii) Shareholders’
of other companies or business entities.
Meeting. A supervisory board is obligatory only
when certain conditions are met in terms of the • A limited liability company must be registered
share capital amount and the number of with the Polish register of entrepreneurs of the
shareholders engaged into the shareholding National Court Register. The commercial
structure of the company. register holds publicly available information of
the company, such as its registered address,
• Incorporation of a limited liability company
personal details of Management Board
requires Articles of Association to be executed
members, dates and other details of
before a Polish notary public. Execution of the
amendments to the Articles of Association and
notarial deed covering this document can be
completed reporting obligations concerning
done on the basis of powers of attorney,
statutory financial statements.
however, in such a case these powers of
attorney shall be drawn-up in the notarial form,
and, if executed abroad, affixed with an
apostille clause.

Phase of establishment of LLC Actions to be taken

• Gathering the information required to draft corporate documentation

• Choosing registered office and premises for the intended business activity
• Drafting Articles of Association and other documents required for LLC
Preparatory phase
establishment
• Choosing bank providing bank account service
• Obtaining excerpt from the commercial register for the Shareholder(s)

• Execution of the Articles of Association before notary public

• Appointment of the Management Board
• Execution of lease/sublease agreement
Incorporation phase • Opening of a bank account in Poland (including performing "KYC"
procedure)
• Executing documents constituting attachments
to motion for the LLC's registration

• Filing of a motion for registration of the LLC in the registry court

• Registration with the National Court Register
Registration phase • Obtaining by the LLC of KRS number (commercial registration number),
NIP number (tax identification number) and REGON number (statistical
number)

Post registration formalities • Completing mandatory reporting with the Polish UBO register;

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 Branch

• The Branch may be established by a foreign - appointment of a person authorized in the

entrepreneur who intends to conduct business Branch to represent the foreign
activity in Poland. entrepreneur; and
• The Branch may be established by - scope of business activities of the Branch.
entrepreneurs of the EU member states or state
• A foreign entrepreneur who established the
member to European Free Trade Association
Branch shall use, for purposes of designating
being a party to European Economic Area
the Branch, the original name of the foreign
without any specific formalities.
entrepreneur in the language of the country in
• Entrepreneurs from countries other than the which his or her registered office is located
above may establish the Branch if there is a together with the name of its full legal form
principle of reciprocity between the given translated into Polish and additional phrase
country and Poland (existence of respective oddział w Polsce (“branch in Poland”).
treaty must be verified in view of jurisdiction of
• Foreign entrepreneur who establishes the
the intended parent company).
Branch must appoint a person authorized in the
• The decision (in most cases in a form of a Branch to represent the foreign entrepreneur.
resolution of competent governing body of the Foreign individual may be appointed as the
foreign entrepreneur) on establishment of the Branch Manager (no domicile or nationality
Branch shall include, in particular: requirements).

LLC Branch office

Legal status of the entity

• has legal personality with full capacity to perform • has no legal personality separate from the legal
acts in law (separated from legal personality of its personality of the foreign entrepreneur
shareholders) • any and all actions taken by the Branch are treated
• is legally independent entity from its shareholder(s) as taken on behalf and for the account of the foreign
entrepreneur for which the foreign entrepreneur is
liable
• in principle, is not treated as an independent entity
(some exceptions in this respect are provided under
Polish law, e.g. in accounting and labour law
regulations)

Range of activities

• the LLC may be established for any legitimate • the Branch may conduct business activity within the
purpose, unless provisions of Polish law provide scope of the foreign entrepreneur’s business activity
otherwise (e.g. requirement that certain activities only
may be performed by joint-stock companies only) the • performance of certain types of activities may require
LLC is obliged to report to the registry court up to 10 additional permits, licenses, concessions etc.
activities, including: 1 key prevailing and maximum 9 •
other activities considered important. The AoA of the
LLC, however, may include more than 10 activities of
the LLC, which is common practice
• the LLC may start business activity upon execution
of its AoA before a Polish notary public, unless
specific licenses, permits, etc. are required under
Polish law for the activity to be conducted by the LLC
(applicable to regulated markets only). In such case
given activity may be started after obtaining relevant
licences, permits, etc

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 LLC Branch office
Commencement of business activity

• from the moment of execution of the AoA before the • the foreign entrepreneur may commence its business
Polish notary public, the LLC may start its business activity within the framework of the Branch, only after
activity, conclude contracts, assume obligations, etc. the Branch has been registered with the NCR
In the period from the execution of the AoA before
the Polish notary public until the registration of the
LLC with the NCR the LLC acts as a company in
organization and, therefore, must use additional
designation "w organizacji" (in English: in
organization) along with its business name (e.g. ABC
Poland spółka z ograniczoną odpowiedzialnością w
organizacji);
• upon registration with the NCR, the LLC in
organization becomes a limited liability company with
a full legal personality

Financing through foreign entrepreneur (shareholder)

• regulated formally – the shareholders may (i) make • not regulated formally – the Branch being
additional payments to the company, (ii) make organizational part of the foreign entrepreneur (no
additional contributions to the share capital, (iii) separation) can be financed by the foreign
increase the share capital in cash or in kind; (iv) entrepreneur in accordance with applicable foreign
grant loans to the company law
• the funds may be transferred from the LLC to the
shareholder in principle under the following legal
titles: (i) dividend, (ii) interim dividend, (iii)
remuneration for the redeemed shares, (iv) based on
agreements between the LLC and the shareholder
(e.g. loan agreement, license agreement etc).

Liability regime

• the responsibility of the LLC is limited to the value of • foreign entrepreneur is liable directly for any and all
LLC’s assets obligations incurred as a result of or in connection
• the LLC’s shareholders are in principle not with the Branch’s activities and operations
responsible for the LLC’s obligations
• the members of the MB of the LLC may be – in
certain cases – jointly and severally liable for the
obligations of the LLC

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Human Capital and labour law

The main, selected steps, related

to employment of an individual by
a Polish employer are as follows:

An employer and an employee shall execute An employer shall provide its employee with
1 the employment contract in writing with at 5 the contents of provisions concerning equal
least minimum statutory regulated content. treatment in employment.

Each new employee shall be, in principle, An employer must registered as an employer
2
subject to an initial medical examination. with the Social Security Institution and must
register the employee as an insured person in
6
the Social Security Institution – within 7 days
An employer must ensure its employee is
from the date of commencement of the
familiar with the provisions and principles of
employment.
health and safety at work concerning the work
he/she performs and all required safety at
3 work regulations shall be observed/required An employer must maintain personal files of
steps related performed. In principle, the an employee in accordance with Polish
employer must ensure that the employee 7
regulations, including regulations applicable to
undertakes initial training in health and safety the personal data protection.
at work prior to commencement of work.

An employer must also properly calculate and

An employer must inform an employee, in pay out the remuneration to its employee, as
writing, not later than within 7 days of the date 8
well as settle all tax and social security
of concluding the employment contract about: contributions related to the employment.
• the standard daily and weekly working
time,
Also both during the pre-employment period and
• the frequency of the remuneration
contacts with candidates, as well as in the course
payments,
• the length of annual leave to which an
of employment relationship GDPR rules shall be
employee is entitled, observed.
• the length of the notice period binding upon Note that if the employee resides in Poland at the
the termination of the employee's conclusion of the employment agreement and the
4 employment contract, agreement is to be performed in Poland, all acts
• any collective labour agreement that covers related to the labour law should in principle be
an employee,
made in Polish. Bilingual versions of documents
• and, if the employer is not obliged to
are allowed, but Polish language version shall
establish work regulations – additionally
prevail.
about the night-time hours, the place, date
and frequency of remuneration payments,
and the adopted procedure of confirming
the arrival and presence of employees at
work, as well as the procedure of excusing
their absence from work.

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Polish law grants employees a range Rules for termination of employment
of protections that create a legal
framework for shaping employment An employment relationship may be ceased:
• by mutual agreement,
relationships. These include in • by one party with notice period being
particular: preserved,
• by one party without notice period (possible
National Minimum Wage exclusively only in the cases specified in the
Labour Code, e.g. disciplinary dismissal or the
An obligation to pay employees at least the employer’s fault).
minimum wage which is a fixed monthly rate and is Termination notice of the employment contract
increased annually (as of 1 January 2021 PLN must be made in writing in Polish language.
2,800 gross, being an equivalent of approx. EUR Additionally, employers are obliged to provide
640 gross). grounds justifying the termination when
terminating: (i) any type of employment contract
Maximum working time without notice or (ii) employment contract for an
indefinite period with notice.
and minimum rest periods
Sick pay
In general, a full-time work week of 5 days must
not exceed on average more than 8 hours per day Generally for the first 33 calendar days of sick
and 40 hours in total. leave in a given calendar year (for employees over
50 years of age – for 14 calendar days) the
employee receives a sickness allowance financed
Annual leaves
by the employer at a rate of 80% (in limited case
A duty to give each employee paid holiday leave. – 100%) of the sickness benefit basis . After 33
Depending on the length of service, the total days (or 14 days as appropriate) of sickness
annual leave of the employee shall be 20 or 26 absence the employee receives the sickness
days. allowance at the same percentage of the sickness
benefit basis for each day of absence covered by
The employee may not waive his/her right to the the Social Security Authority from the Sickness
annual leave. The unused holiday is transferred to Insurance of Social Security Coverage.
a subsequent calendar year and should be used
by the employee before 30 September of such Various benefits for the employee
year.
in connection with childbirth
The limitation of the number
including the right to at least 20 weeks of
of temporary employment contracts pregnancy and maternity leave, as well as 32
weeks of leave for parents. The total length of
that can be offered to an employee (up to three maternity leave and leave for parents increases
fixed term contracts within a period not exceeding depending on how many children were born and
33 months in total) – only limited exceptions apply. equals to:
• 65 weeks (31+34), in case of 2 children;
An obligation not to discriminate • 67 weeks (33+34), in case of 3 children, etc.

against employees A general duty to provide

including job applicants, on a range of grounds, a safe place of work
covering i.a. regardless of sex, age, disability,
race, religion, nationality, political beliefs, trade safe access and safe work systems, supported by
union membership, ethnic origin, creed, sexual related obligations such as consulting with
orientation, as well as regardless of employment employees or their representatives on health and
for a definite or indefinite period of time or full-time safety issues and providing staff with certain health
or part-time employment. and safety information.

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Right of association
Based on the Polish Labour Code, all employees
have the right to freely join trade unions. A
minimum of 10 persons is necessary to establish a
trade union and the employer cannot limit this right
in any way. Trade unions must be consulted in a
number of issues - both relating to individual and
collective employment affairs, e.g. while
terminating employment contracts or adopting
internal by-laws.
Irrespective of the employees right to associate in
trade unions, the employer is obliged to inform
employees on the possibility to establish a
works council if it employs at least 50 employees.
Establishment of the works council is not
mandatory, as the initiative is on the employees’
end, however, the employer must fulfil the above
notification obligation.

Collective labour law regulations:

In principle the following collective labour law
regulations are required to be established in case
of an employer employing 50 employees
(or more):

Remuneration regulations
– if an employer is not covered by an
enterprise collective labour agreement;
Workplace regulations unless in-scope
regulations were covered in a collective
labour agreement;
Social Benefit Fund and its regulations
– where there are 50 full-time equivalents
(FTE) employees as of 1 January of
a given year.

At the request of the trade union, the

establishment of the above shall be obligatory for
employees employing at least 20 employees (20
FTEs in case of Social Benefit Fund and its
regulations).

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Taxation

Overview

Poland has a relatively complex fiscal system.

This is supported by the global Paying Taxes
study: PwC annually assesses the ease with
which tax obligations can be met. Paying Taxes
compares the tax burden and compliance
obligations of 190 countries around the world.
Paying Taxes 2020 shows that Poland ranks 77
overall. This is caused by complicated legislation
which is often amended, however the legislators
are making lots of efforts to use technology to
facilitate tax compliance. Please find more
information in our Paying Taxes study.

Poland has a competitive statutory corporate

income tax flat rate of 19 per cent. Small
taxpayers, that is those that have not exceeded
1,2 mln of revenues or those that have started
their business activity, can benefit from the 9 per
cent flat rate, if certain conditions are met.

https://taxsummaries.pwc.com/poland

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Quick rates and dates

Corporate income tax (CIT) rates

Headline CIT rate (%) 19

Corporate income tax (CIT) due dates

Within three months following the end of the tax

CIT return due date
year

Within three months following the end of the tax

CIT final payment due date
year

Monthly instalments paid by the 20th day of the

CIT estimated payment due dates
following month.

Personal income tax (PIT) rates

32, plus 4% solidarity tax on income exceeding

Headline PIT rate (%)
PLN 1 million

Personal income tax (PIT) due dates

PIT return due date 30 April

PIT final payment due date 30 April

20th day of the month following the month when

PIT estimated payment due dates
the income was received

Value-added tax (VAT) rates

Standard VAT rate (%) 23

Withholding tax (WHT) rates

Resident: 19 / NA / NA;
WHT rates (%) (Dividends/Interest/Royalties)
Non-resident: 19 / 20 / 20

Capital gains tax (CGT) rates

Headline corporate capital gains tax rate (%) Capital gains are subject to the normal CIT rate.

Transfer of real property: Subject to the normal

Headline individual capital gains tax rate (%) PIT rate.
Transfer of shares: 19.

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Corporate Income Tax

Corporate – Taxes on corporate Polish companies with foreign participation may be

income set up as either limited liability companies, joint-
stock companies, simple joint-stock companies,
The CIT is the tax levied on corporate income. limited partnerships, or joint-stock limited
The standard CIT rate is 19%. partnerships. There is no limitation on the
The reduced CIT rate of 9% can be percentage of foreign participation. The above-
mentioned types are subject to the general CIT
applied for income, other than capital rules, including the standard 19% tax rate (and
gains, if the taxpayer: other rates, depending on the type of revenue
• is a small taxpayer (i.e. taxpayer whose value sourced in Poland). The same rate applies to
of sales revenue, including the amount of VAT branches of foreign companies (see the Branch
due, did not exceed the amount corresponding income section for more information).
to the PLN equivalent of EUR 2 million, in the Certain entities are explicitly excluded from the
previous fiscal year) or group of taxpayers under the CIT law (e.g.
• started its business activity, provided the Treasury, National Bank of Poland). Polish and
establishment of the company was not a result EU/EEA-based investment funds are also
of transformation or merger (in the first tax exempted on the grounds of such provisions.
year). Revenues resulting from the receipt of dividends or
The lower rate does not apply to tax capital groups other payments from participation in the profits of
nor companies created as a result of certain legal persons are subject to WHT in Poland (see
restructuring operations (mergers, contribution of a the Withholding taxes section for more
going concern, etc.). information).

Polish tax residents are subject to tax on their

worldwide income, unless there is an applicable
double tax treaty in place between Poland and the
relevant country that provides that the foreign
income shall be exempt from taxation in Poland.
Non-residents are taxed only on their Polish-
sourced income. Double tax treaties concluded by
Poland may result in specific income being not
taxable in Poland irrespective of its source.
There is a separation of income/loss sourced from
capital transactions (capital gains) from other
income/loss sources (also referred to as
income/loss from operational activities). Revenues
and costs related to each ‘basket’ are disclosed
separately. There is no possibility to set-off income
derived from one ‘basket’ with loss borne in the
other ‘basket’. Income in both baskets is taxed at
19% CIT. Apart from share/capital transactions,
the capital basket includes royalties, license fees,
and similar rights.

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Minimum income tax It is possible to choose an alternative method of
determining the tax base amounting to 3% of the
Minimum Income Tax is a new tax obligation which value of revenues other than from capital gains in
is applicable to taxpayers declaring tax losses or the tax year.
negligible income (=<2% of the revenue).
The provisions provide for a list of reductions from
The regulations are postponed until the end of the tax base (e.g. the amounts of donations or
2023. As a result, the minimum tax will be R&D relief, for prototypes and robotization,
applicable from 1 January 2024, and the first SEZ/PIZ revenue, the value of expenses included
payment will occur in 2025. in the tax year as deductible costs resulting from
The minimum income tax rate is 10%. the acquisition, production or improvement of fixed
assets, including through depreciation).
The tax base is to be the sum of the following:
The minimum tax not apply, inter alia, to financial
• 1,5% of operational revenues (other than from enterprises, start-ups, entities whose profitability in
capital gains), plus any of 3 prior years was no less than 2% and
• "excessive" debt financing costs paid to related taxpayers who recorded over 30% decrease in
entities (generally debt financing costs revenues.
exceeding 30% of the so-called tax EBITDA), The amount of the minimum tax paid for a given
plus tax year may be deducted from the due CIT
• costs of intangible services or royalties paid to calculated using the traditional method for the
related entities - exceeding PLN 3 million plus consecutive three tax years immediately following
5% of the so-called tax EBITDA. the year for which the taxpayer has paid the
minimum income tax.

Exit tax
The concept of exit tax exists in Poland and
assumes a taxation of unrealised capital gains in
the case of transfer of assets, change of tax
residence (including cross-border transformation,
which may be interpreted as cross-border
mergers), or change of taxpayer's PE outside the
territory of Poland. The exit tax rate is established
at 19%. The tax base is the surplus of the market
value of assets, with respect to which Poland would
lose taxing rights, over their tax value. Under
certain conditions, taxpayers may be able to apply
for payment in installments for a period not
exceeding five years.

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Optional tax rules (so-called ‘Estonian The lump sum tax on income is accrued at the
CIT’) moment of the distribution of profit and in a
different amount than the standard CIT. For small
From 2021, a new, optional and autonomous taxpayers and for taxpayers starting business
system of taxation of companies was introduced activity on these principles, it is 10% of the tax
into the Polish legal system - commonly referred to base. In the case of other taxpayers, it is 20% of
as 'Estonian CIT'. In this model, the tax is paid only the tax base.
when the income is distributed (e.g. in the form of
a dividend). In 2022, the Polish Deal introduced Considering the tax due from shareholders on
important amendments with regard to the scope profit distribution (at 19%) and special mechanism
and application of the lump-sum scheme of of reduction of PIT liability, the effective tax rate
Estonian CIT. (i.e. combined CIT and PIT taxation) for Estonian
CIT – assuming it is applied by the taxpayer for 4
The scheme is addressed to entities operating as tax years – is approx.:
joint-stock companies, limited liability companies,
limited partnerships or limited joint-stock • 20.83% – for non-small taxpayers (taxed at a
partnerships that meet the following criteria: rate of 20%),

• The shareholders are exclusively natural • 18.18% – for small taxpayers (taxed at a rate of
persons. 10%).

• The company has no shares in other entities. The deadline for paying the lump sum tax has
been extended to the end of the third month of the
• The company employs, apart from the tax year following the year in which the profit was
shareholders, at least three employees on the distributed (i.e. a resolution was adopted on the
basis of an employment contract (or at least division or coverage of the net financial result or
three persons engaged on the basis of other the net profit income was distributed).
contracts, provided that incurs monthly salary
expenditures in the amount of at least three
times the average monthly salary).
• Passive revenue does not exceed 50% of all
company revenues obtained from its activities
in the previous tax year, calculated including
the amount of VAT due.

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Diverted profits tax Minimum tax on buildings
In 2022 the new provisions regarding “diverted Minimum tax on buildings is a special type of tax
profits tax” were introduced (as part of the Polish on kind of “deemed” taxpayer’s income from
Deal reform programme). The Act of 7 October buildings, ie, initial value of the taxpayer’s
2022 amending, among others, the CIT Act (Polish buildings, decreased by 10m PLN.
Deal 3.0), also introduced further changes to the
The basic principles regarding minimum tax on
provision on diverted profits that apply as of 1
buildings are as follows:
January 2023. Some of the introduced changes
were defined as clarifying ones. As a result, it • is calculated separately from the “regular” CIT;
seems reasonable to consider the impact of the
• currently all types of commercial buildings
amendments not only on future but also on
subject to lease/tenancy (including hotels) fall
settlements for the tax year 2022.
within its scope;
This tax can be imposed at 19% on “diverted
• is payable on a monthly basis at the rate of
profits” understood as certain qualified costs (such
0.035% (which roughly translates to the rate of
as e.g. intangible services, royalties, debt financing
0.42% per annum);
cost or payments for transfer of functions, assets
or risks) incurred - directly or indirectly - for the • may be set-off against “regular” CIT liability.
benefit of non-resident related entities and treated Therefore, in practice minimum tax on buildings
as tax-deductible by the Polish taxpayer, provided results in additional tax burden only if: (i) no
that: regular CIT is paid by the taxpayer; or (ii)
• on side of the payment recipient, such qualified taxpayer’s regular CIT is lower than the
costs constitute not less than 50% of the minimum tax on buildings;
revenue obtained by that related entity, • if this minimum tax is higher than the “regular”
• the income tax paid by the recipient - with CIT, the excess may be refunded by the tax
regard to a specific type of income of this entity office provided that no irregularities in regular
from one of the individual titles listed in qualified CIT are identified in the course of a special
costs list, e.g. income from interest, consulting proceeding initiated by the taxpayer.
services or royalties - for the year in which it
received the due amount from the Polish
company, is lower than 14,25% (¾ of standard
Polish CIT rate 19%),
• a related entity must transfer an adequate
amount of profits received from the taxpayer
and its related entities to another entity (in the
form of expenses deductible for tax purposes or
distribution of profits).
Diverted profits tax is payable if the sum of
qualified costs incurred in a tax year towards
related entities constitutes not less than 3% of the
sum of tax deductible costs incurred in that year in
any form.
The burden of proving that a given expense does
not meet the definition of diverted profit will rest on
all Polish taxpayers making payments to foreign
related entities.
As a “safe harbour” mechanism, the “diverted
profits tax” should not apply if the above costs are
incurred for the benefit of a related entity subject to
taxation on its worldwide income in the EU / EEA
(assuming that this entity conducts a genuine and
material business activity).

PwC 21
Corporate tax compliance obligations

Taxable period Tax returns Payment of tax

The taxable period is the Companies are, in general, The same deadline as the
calendar year (between 1 required to file their tax CIT return applies to the
January and 31 December). returns electronically. The settlement of the annual CIT
Companies are entitled to annual CIT return should be liability. In financial terms,
choose another (than submitted to the tax office the final settlement is not
calendar) fiscal year (e.g. within three months following significant since most of the
between 1 April and 31 the end of the tax year. annual liability is paid by CIT
March). advances throughout the tax
year.

The CIT advances should be paid for each month Tax audit process
by the 20th day of the following month. Entities
that started business activities (except for The tax authorities generally shall notify its
companies organised as a result of certain intention to initiate a tax audit. The inspection shall
transformations) and entities whose gross sales be initiated not earlier than after seven days and
revenue (including VAT) in the prior tax year did not later than 30 days from the receipt of the
not exceed EUR 2 million are entitled to opt to notice.
make advance settlements on a quarterly basis The duration of all audits in one calendar year may
(instead of a monthly basis). not exceed the following:
Individual tax account numbers • For micro entrepreneurs: 12 working days.
As of 1 January 2020, each PIT, CIT and VAT • For small entrepreneurs: 18 working days.
taxpayer or tax remitter should transfer all of their
Polish tax liabilities to a given tax office’s bank • For medium entrepreneurs: 24 working days.
account using an individual tax account (‘tax • For large entrepreneurs: 48 working days.
microaccount’) identifying a given taxpayer or tax
remitter. The tax microaccount may be checked The rules mentioned above do not apply to the
using the generator or at any tax office. inspection commenced by the customs and
revenue office. This kind of tax inspection is
Generating an individual tax account is not initiated without issuing a notification and in
possible without the appropriate tax identification practice there is a possibility to prolong the
number. Taxpayers awaiting for a decision on inspection without any specific time limits.
granting the tax identification number (NIP), pay
the amount due to the tax micro-account of a
competent tax office.

PwC 22
 Tax liability expires five years after the end of the calendar year in which
Statute of
the tax payment deadline passed. There are also situations when the
limitations statute of limitations can be suspended or interrupted (e.g. litigation).

In recent years we observe that the most inspections concern VAT - frauds
Topics of focus and validity of the VAT refund (around 60%). This is undoubtedly related to
for tax the introduction of the Standard Audit File (JPK), submitted by all VAT
authorities payers. The focus of the tax audit authorities is also on transactions
between related parties (transfer pricing issues) and tax restructuring.

Binding rulings General binding rulings are issued by the MoF in order to ensure the
and APAs uniform application of tax law by tax authorities.

Individual binding rulings are issued at a Cooperation agreement with the Head
taxpayer’s request in individual cases. A ruling of the National Fiscal Administration
should be provided in three months and is subject
to the payment of a fee (immaterial amount). If no The entrepreneur being a party to the cooperation
decision is taken within the deadline established, agreement will have the opportunity to discuss with
there is a tacit approval of the taxpayer's the Head of the National Fiscal Administration
understanding of the tax matter. important issues related to the tax settlements.
Such arrangements may concern, among others:
The individual tax ruling provides protection only to
the entity which requested the ruling. However, if • Interpretation of tax laws and the content of tax
the same factual state or future event applies to rulings.
two or more taxpayers (eg, parties to the same • Transfer pricing rules.
transaction), they may submit a joint application for
an individual tax ruling. • The amount of advance income tax.
The ruling is not binding for the tax authorities (eg, • Non-applicability of the general anti-avoidance
tax offices and fiscal control offices) from the rule.
formal point of view. Nevertheless, according to The cooperation agreement may provide the
the law, compliance with the interpretation should taxpayer with benefits such as reduction (by half)
not lead to any harm to the taxpayer, ie, if the of the fees for an APA and for a security opinion,
taxpayer follows the ruling, he should not be as well as reduction (or, in some cases, even the
obliged to pay any penalty interest or be subject to lack) of interest on tax arrears. The cooperation
fiscal-penal responsibility even if the tax authorities agreement may also protect an entrepreneur
do not agree with the ruling in their proceedings. against additional tax liability and the tax audit.
In case of rulings covering future events (eg Moreover, the custom and fiscal control of a
rulings obtained prior to closing of a given taxpayer who is a party to the cooperation
transaction), the taxpayer should also be protected agreement will be carried out only by the Head of
not just against interest and penal fiscal liability, the National Fiscal Administration.
but also against the base tax liability.
Entities performing related party transactions may
also apply to the Head of NRA for Advance Pricing
Agreements (APAs) available under certain
condition.

PwC 23
Investment Agreement The regulations indicate two types of fees that
investors will have to pay in order to enter into an
As of 1 January 2022, the so-called 'Investment agreement: an initial fee and a main fee. The initial
Agreement', an agreement concluded between an fee, which is the payment for the application, is to
investor and the tax authority that concerns the tax amount to PLN 50,000 (from each investor filing in
consequences of a planned investment in Poland, the application). The conclusion of an Investment
was introduced. Agreement is to be subject to a main fee of not
The Investment Agreement is a new solution that less than PLN 100,000 and not more than PLN
has not been previously present in the Polish tax 500,000. The amount of the fee will depend on,
system. The conclusion of an Investment among other things, the declared value of the
Agreement is to protect the investor from the investment and its complexity.
negative tax consequences more than individual An Investment Agreement is to be equivalent to
tax rulings do. At the same time, it gives the the following administrative acts:
investor an opportunity and an incentive to join the
'cooperation agreement' with the Head of the • Advance pricing agreement (unilateral only).
National Treasury Administration after the • GAAR ruling.
investment is made.
• Binding Excise Information.
An Investment Agreement takes the form of an
• Binding Rate Information.
agreement concluded between the MoF and an
investor, i.e. an entity that plans or has started an • Individual tax ruling.
investment on the territory of Poland with a value The agreement may cover all or some of the
of at least PLN 100 million (PLN 50 million from above acts. It is valid for five years from the date of
2025). An Investment Agreement is addressed issue. It is possible to renegotiate its contents,
primarily to foreign entities planning to start a new resulting in changes to the agreement, including
business in Poland. Nevertheless, Polish residents extending its duration.
are not excluded from benefiting from these
regulations.

PwC 24
General anti-abuse rule (GAAR)
In line with GAAR, legal transactions with the main
purpose of obtaining a tax advantage contrary to
the tax regulations shall not result in tax benefit.
Tax consequences of such transactions will be
assessed as if an alternative 'appropriate'
transaction had taken place. Furthermore, if
transactions carried out by a taxpayer do not have
any real economic or business rationale other than
tax avoidance, tax authorities may completely
disregard them.
The GAAR is applicable to the tax benefits
received after the amendments were introduced
(i.e. 15 July 2016). This means that the sole fact
that the transaction was carried out before the
amendments entered into force may not exclude
application of the regulations in case the taxpayer
obtains a tax benefit after the GAAR is introduced.
As of 1 January 2019, there is a penalty payment The Polish tax Law also contains:
in the form of an additional liability of 40% (or 10%)
of the tax liability resulting from the application of 1 other specific anti-abuse / anti-avoidance
the clause. Penalty payment also covers provisions dedicated to certain
application of other anti-abuse clauses, transfer transactions / events (eg anti-abuse
pricing settlements, and cases where the WHT provisions in the CIT Law covering certain
payer issued an incorrect statement and did not types of transactions / distributions such
make the required verification with reference to the as mergers, dividend payments, interest
WHT rate. The 10% rate may apply to income payments or share-for-share exchanges);
taxes where income constitutes the tax base. 2 “exit tax”;
The above penalty payment rate may be doubled anti-abuse provisions included in the VAT
in the case of tax benefits exceeding PLN 15 3
Law,
million, where the taxpayer has previously
received a final decision on the basis of anti-abuse 4 MDR.
provisions, or in the absence of transfer pricing
documentation. In certain circumstances, the
above rates may also be reduced by half.
The applicability of the GAAR clause has been
also extended to remitters. A number of detailed
changes in the application of the GAAR clause has
been introduced, including proceedings for issuing
of a protective opinion by the Head of National
Revenue Administration (NRA). The protective
opinion is issued if the circumstances presented in
the application indicate that the tax benefit
described in the motion is not subject to GAAR. In
case of the motions for issuance of the protective
opinions, the Head of NRA analyses the case
more deeply than in case of individual tax rulings
(eg tax ruling fully relies on the descriptions of the
backgrounds presented by the taxpayers).

PwC 25
Corporate – tax credits and incentives

Foreign tax credit Applying for the income tax exemption within the
PIZ requires declaration to meet numerous quality
Resident corporations are taxed on their worldwide criteria. Some of them remain common for all
income unless there is an applicable DTT in place types of investment projects. The minimum
between Poland and the relevant country that number of required quality points vary from 4 to 6
provides that the foreign income shall be exempt points out of 13 possible and depends on the
from taxation in Poland. In all other cases (in investment location.
particular, when the income is not covered by any
treaty), Poland uses the ordinary credit method to The core obligations regarding income tax
avoid double taxation. Therefore, a Polish resident exemption within the PIZ are:
is liable for income tax imposed on its worldwide • Project implementation may begin no sooner
income, but the tax is proportionately reduced by than the day after the date of submission of
the income tax paid abroad. complete documentation to the PIZ.
• Five-years investment maintenance after
completing the project.
• Keeping ownership on acquired fixed assets for
five years from the day of registering them.
Polish Investment Zone (PIZ) • Maintenance of workplaces created for the
project purpose for up to five years.
At the end of June 2018, new regulations on
applying for the income tax exemption due to the • Necessity to incur declared value of CAPEX.
new investment implementation entered into force Until the new regulation entered into force, Polish
(so-called PIZ), which replaced the previous legislation provided investment incentives related
Special Economic Zones system. The biggest to business activities carried out in 14 zones
change is that the possibility to obtain a tax defined as SEZs. A business entity could benefit
incentive does not depend on the location of the from tax incentives, provided that the entity
new investment, which does not necessarily have obtained a permit from the Ministry of Economic
to be on the territory of a Special Economic Zone Development to conduct business activities there
(SEZ). and met other legal requirements. Note that a CIT
The amount of the incentive (which is income tax credit applied only to income earned on activity
exemption) is calculated exactly the same as conducted within the territory of SEZs and covered
within the SEZ system and depends on the: by permit. According to current regulations, the
deadline for utilising the available tax credit from
• value of incurred eligible costs of the the previous SEZ system is the end of 2026
investment (investment capital expenditures or (previously 2020).
two-year labour costs of the new employees)
• state aid intensity in a selected region, and
• size of the enterprise.
The right to use the exemption is granted for 10,
12, or 15 years, depending on the investment’s
location.

PwC 26
 Also, taxpayers may deduct expenditure incurred
on employees that covers the costs of staff hired
by taxpayers for R&D purposes under selected
civil law contracts (previously only on an
employment contract basis).
The R&D tax relief is available to taxpayers who,
during the tax year, have operated in a PIZ on the
basis of a decision on support, regarding eligible
costs that were not recognised as costs of running
the activity covered by the PIZ decision.
From 2022, there is an increase of the existing
deductions in income taxes from 100% to 200% of
Tax relief for research and qualified costs incurred on employees that covers
development (R&D) the costs of staff hired by taxpayers for R&D
purposes.
Entrepreneurs have the possibility of a tax
deduction of costs incurred for R&D. The value of Innovation Box
the deduction varies depending on the size of the
company and type of eligible costs. As of 1 January 2019, a new mechanism reducing
tax rate to be applied to income derived from
Eligible costs include the following six categories intellectual property (IP) rights (Innovation Box)
of R&D expenditures: has been introduced.
• Employees’ wages and social contributions. The Innovation Box scheme reduces, to 5%, the
• Purchase of commodities and raw materials. tax rate applicable to an income derived from IP
rights.
• Expertise, research, and opinions bought from
scientific units. The adjustment relates to the ratio of costs
incurred on self-developed of IP rights in R&D
• Payments for use of research equipment. activity and costs of subcontracting of R&D
• Amortisation of intangible assets and fixed activity.
assets, excluding passenger cars, buildings, Taxpayers applying the Innovation Box scheme
and constructions. shall be entitled to benefit from the tax preference
• Costs of obtaining IP protection. until a given right expires (20 years in case of a
patented invention).
To benefit from the tax relief, each entity needs to
perform R&D works and prepare a record of the The tax preference applies provided that a
eligible costs incurred in relation to R&D works in a taxpayer conducts R&D activity related to
given year. It is not important whether the R&D development, creation, or improvement of a given
works end with success or the level of IP component. In order to benefit from the scheme,
innovativeness of future effects of those works. taxpayers will be required to separate the
Tax relief is also allowed for qualifying projects in discussed income in their accounting books.
progress (e.g. projects launched in previous The new provisions complement the Polish
years). innovative activities tax preferences system by
From 2018, there is an increase of the existing supplementing the existing R&D tax relief.
deductions in income taxes from 50% and 30% Previously, an entrepreneur introducing an
(depending on the category of eligible costs and invention to the market was required to tax income
the size of the taxpayer) to 100% of qualified with a standard tax rate. Upon R&D relief, the
costs, irrespective of their category and size of the entrepreneur is now entitled to a tax relief
taxpayer (which has hitherto differentiated the calculated on the basis of qualified costs incurred
allowed deduction limits). This means that all (e.g. on development of an invention).
taxpayers benefiting from R&D tax relief will be
able to save in income tax PLN 19 on every PLN
100 of qualified costs starting from 2018.

PwC 27
Simultaneous IP BOX and R&D relief Relief for Robotisation
A taxpayer commercialising the results of R&D The relief for robotisation was introduced for a
and obtaining qualified income from it within the period of five years and covers expenses from the
meaning of the IP Box provisions has the beginning of the 2022 fiscal year until the end of
possibility of deducting R&D relief from the IP Box the 2026 fiscal year. It is available to both PIT and
income of eligible costs incurred to develop the CIT payers investing in robotisation, regardless of
right covered by IP Box. the size of their operations. Entrepreneurs are
additionally able to deduct 50% of the costs
Innovative employees tax relief
incurred for investments in robotisation.
The innovative employees tax relief mechanism is
The deduction is to apply in particular to:
an extension of the existing R&D relief. Taxpayers
benefitting from R&D tax relief that had not been • purchase or financial leasing of new robots and
settled in the previous year are able to deduct it cobots
from advances for PIT paid by the employer due
• purchase of software necessary for the proper
to:
start-up of new fixed assets in the field of
• service relationship, employment relationship, robotisation
contract work, cooperative employment
• purchase of accessories (e.g. tracks,
relationship
turntables, controllers, motion sensors, end
• services provided under a contract of mandate effects)
or contract for specific work, and
• purchase of occupational health and safety
• copyrights. (OHS) devices, and
The condition for the deduction will be that a given • training costs for employees who will operate
employee devotes at least 50% of the total working the new equipment.
time directly to R&D activities in a given month.
The value of the deduction may not exceed the
The deduction will be valid from the month in
amount of income in a given tax year.
which the taxpayer submitted a tax return for a
given year until the end of that tax year.

PwC 28
Relief for prototype
The prototype relief allows a deduction from the
tax base of 30% of the sum of the costs of the trial
production of a new product and the launch of a
new product, but the amount of the deduction
cannot exceed 10% of the income earned from
sources other than capital gains in a tax year. It is
an extension of the already existing R&D relief,
and its scope covers the stage after completion of
R&D works but before mass production of the
developed product.

Relief for expansion

The deduction is limited to selected costs
The main purpose of the tax relief for expansion is
covering:
the possibility of an additional deduction of the
• the purchase price or production cost of new value of expenses related to the increase in
fixed assets necessary to start trial production revenues from the sale of products. The product
of a new product may be an item already produced by the taxpayer
or an item not yet offered by the taxpayer and not
• purchase costs of materials and raw materials
yet offered in a given country.
purchased solely for the purpose of trial
production of a new product The relief may be settled on an ongoing basis, and
the increase in revenues should be shown for two
• costs of improvement incurred to adapt the
years, which requires monitoring of revenues
fixed asset to launch trial production of a new
obtained from products to which eligible costs
product
were allocated.
• research, expertise, and certification costs
Expenses for the expansion is eligible for a two-
• product life cycle studies, and fold deduction up to the amount of PLN 1 million in
a given tax year.
• environmental technology verification system.

The costs associated with increasing revenues

from the sale of products are:
• participation in fairs (e.g. organisation,
accommodation)
The costs incurred have to be shown in the annual • promotional activities
tax declaration with the possibility of their
• adaptation of packaging to the contractor's
deduction in the next six years following
requirements
immediately after the year in which they were
incurred. • preparation of documentation for the sale of
products (e.g. certification of goods and
registration of trademarks), and
• cost of tender documentation.

PwC 29
Relief for corporate social The expenses must be incurred directly for making
responsibility (CSR) the IPO, i.e. related directly and exclusively to the
IPO, and incurred in the IPO year or in the
The CSR relief enables the deduction of an preceding year, but not later than on the IPO date
additional 50% of selected costs from the tax base when the taxpayer introduced the shares to trading
incurred on activities such as sports, culture, for the first time.
higher education, and science. The new
preference, similar to the R&D relief in force for Relief for consolidation
several years, is deductible in the tax return for the The taxpayer who bears the eligible expenses for
tax year in which the costs were incurred. the acquisition of shares in a capital company has
the right to reduce its tax base by these expenses
Eligible costs include: in the year in which they are actually incurred,
purchase of sports equipment, covering the costs while meeting the following conditions:
of organising or participating in sports • The company whose shares are acquired has
competitions, covering the costs of using sports its registered office or management board in
facilities for the purposes of sports training, and the territory of the Republic of Poland or in a
financing sport’s scholarships country with which the Republic of Poland has
costs incurred for sport’s events not being mass concluded a double taxation agreement.
sport’s events • The main activity of the company whose shares
costs incurred for the benefit of cultural are acquired is the same as the subject of the
institutions entered in the register of cultural taxpayer's activity, or the company's operations
institutions, as well as for financing cultural may be considered to support the taxpayer's
activities carried out by art academies and public activities, excluding financial activities.
art schools, and • The main activity of the company whose shares
costs incurred for student scholarships for are acquired is conducted at least 24 months
academic performance or sports and for research prior to the acquisition of the shares.
scholarships for doctoral students, costs of fees • Within 24 months prior to the acquisition of the
related to the education of an employed shares, the company and the taxpayer were not
employee in studies, post-graduate studies and related parties.
other forms of education, and costs of
remuneration of students during internships work • The taxpayer is required to acquire shares in
placements. one transaction representing an absolute
majority of voting rights (51%).
Relief for initial public offerings (IPOs) The maximum amount of the deduction in a tax
year is PLN 250,000.
The relief for IPOs allows for the deduction of
costs incurred in the scope of the IPO.
Eligible expenses subject to deduction include
The catalogue of eligible expenses is closed and is the following:
divided into the following two categories:
• Legal services for the purchase of shares or
Expenses eligible for 150% deduction: stocks.
• Preparation of the prospectus. • Taxes charged directly on the transaction.
• Notary, court, fiscal, and stock exchange • Notary, court, and fiscal fees.
fees.
• Preparation and publication of The deduction of expenses related to the
advertisements required by law. acquisition of another company is possible in the
tax year in which the taxpayer acquires shares in
Expenses eligible for 50% deduction (limit of that company and applies to the amount of
PLN 50,000): expenses incurred by the taxpayer in that tax year.

• Advisory, legal, and financial services costs.

PwC 30
Individual – Taxes on personal income

Polish tax residents pay PIT on their worldwide

income. Non-residents are subject to Polish PIT on
their Polish-sourced income only.

Personal income tax rates

General PIT rules provide for the rates shown in
the following table:

Annual taxable income (PLN)

Over Not over Tax rate

12% of the base less the

0 120,000 amount decreasing tax (PLN
3,600)*

PLN 10,800 + 32% excess

120,000
over PLN 120,000

* In the case of income up to PLN 120,000, the tax is 12% minus the amount decreasing tax, which is PLN 3,600 (i.e. 12% of PLN
30,000, which is the tax-free amount of income).

The tax-free amount is set at PLN 30,000 and was

introduced as of 1 January 2022. This means that
taxpayers earning less than PLN 30,000 per year
will be exempt from paying tax.
In the case of income exceeding PLN 120,000, the
tax is PLN 10,800 + 32% of the excess over PLN
120,000. The decreasing tax amount is already
included in the above sum of PLN 10,800.

PwC 31
 Taxation of income from business
Special rules for non-residents
activity

Individuals running business activities (as sole Specified types of income, if gained by non-
traders or as partners in partnerships) can, instead residents, are subject to special treatment.
of being subject to the tax scale, opt for a flat 19% Namely, they are taxed at a flat rate of 20%
income tax rate, lump-sum tax, or the so-called calculated on revenue (cost deductions are not
'tax card'*, subject to certain conditions. allowed) unless a double tax treaty (DTT) between
* Please note that the ‘tax card’ was liquidated as of 1 January
Poland and the individual’s country of residence
2022 as a method of tax settlement, and only taxpayers who provides otherwise. These types of earnings
settled in the form of a tax card in 2021 will still be able to use include the following:
it; however, if they resign from this option, they will not be able
to return to the tax card in the following years. • Revenue from copyrights and other intellectual
property (IP), such as trademarks, patents, and
designs (including revenue from sale of the
Taxation of capital gains rights in question).
• Income from transfer of technology and know-
Capital gains (including dividend and interest how.
income) are taxed at a flat rate of 19%. The tax-
free amount does not apply to this income. • Remuneration for leasing industrial,
commercial, or scientific equipment.
• Income from independent work in the fields of
Taxation of rental income art, literature, science, education, journalism,
and sport (including income from participation
Currently, taxpayers can choose the method of in artistic, scientific, and cultural competitions).
taxation of rental income, i.e. taxation with a tax • Income from work commissioned by national or
scale or a lump-sum tax on recorded revenues. local authorities or administrative bodies,
As of 2023, the rental income will be taxed only as courts, prosecutors.
a lump-sum tax on recorded revenues (8.5% rate • Income received as fees for membership in
for revenues below PLN 100,000 per year and boards of directors, supervisory boards,
12.5% on the surplus over PLN 100,000). This committees, and other decision-making bodies
means that the total rental income will be taxed of legal entities.
without the right to deduct costs of earning income
(e.g. maintenance costs, utilities). • Income from rendering personal services based
on the agreement with a natural person or other
entity as long as these services are not
rendered within the scope of independent
business activity (i.e. they are not offered to the
public).
• Income received from activities performed
personally under management or similar
contracts.

Solidarity tax
As of 1 January 2019, individuals who derive in a
tax year income exceeding PLN 1 million are
required to pay solidarity tax at the rate of 4% on
the excess of this amount. An obligation of
submitting a separate tax declaration by 30 April of
the following tax year will also apply.

PwC 32
Value Added Tax

Value-added tax (VAT)

Polish VAT applies to the following activities:

Supplies of goods and services within the territory of Poland

Exports of goods outside the territory of the European Union

Imports of goods from countries that do not belong to the European Union

Intra-Community acquisitions of goods (imports from countries belonging to the European

Union)

Intra-Community supplies of goods (exports to the countries belonging to the European Union)

VAT rates
The VAT rates are 23% (standard rate), 8%, 5%, Zero-rated activities include, among others,
0%, and exemption. exports of goods to countries outside the
European Union.
The standard 23% VAT rate generally applies to
the supply of all goods and services, except for VAT-exempt supplies include, among others,
those that are covered by special VAT provisions certain financial, insurance, and educational
that provide other rates or treatments. services.
Supplies covered by a reduced rate of 8% include, In the period from 1 February 2022 to 31
among others, supplies of pharmaceutical December 2022 – so as to counteract the effects
products and passenger transport services and of the inflation in Poland – the tax rate for the basic
also supply of goods for the Social Housing food products, other than classified according to
Programme (no greater than 150 square metres). the Polish Classification of Goods and Services
under food and beverage serving services, has
Supplies covered by a reduced rate of 5% include
been reduced to 0%. It is expected that the
books and journals, unprocessed food, and basic
reduced VAT rate will apply until June 30, 2023.
food.

PwC 33
Basic calculation rules
In general, the VAT due equals the VAT on
outputs decreased by the VAT on inputs (in other
words, input VAT is deducted from output VAT).
Input VAT may be deducted from output VAT
when a business (with a VAT payer status)
receives an invoice for goods or services
purchased. Input VAT may not be deducted
unless a purchased supply is linked to the
VATable activities. Furthermore, the deductibility
of input VAT is restricted by the VAT law with
respect to the purchase of certain goods and
services. In addition, subject to numerous
conditions, output VAT may be reduced when
receivables, resulting from VATable sales,
become uncollectible.

'White list' of VAT payers

The amendment of the Polish VAT Act introduced Obligation to settle expenses with use of bank
regulations on the electronic database of accounts mentioned in the White list is applicable
taxpayers registered for VAT purposes in Poland. to transactions exceeding a value of PLN 15,000.
Expenses paid via transfer to a bank account not
As of 1 September 2019, the electronic database
included in the list cannot be treated as a tax
of taxpayers (‘White list’) was introduced. The list
deductible cost. Additionally, payments made to
contains data on the VAT status of the entities, in
accounts not included in the list result in joint and
particular:
several liability for VAT obligations of the supplier,
• entities that were not registered for VAT in the amount equal to the VAT proportionally
purposes (or were de-registered), and attributable to the transaction.
• entities registered as VAT payers (i.e. data on Above sanctions do not apply if the taxpayer
active and exempt VAT taxpayers), including notifies the head of the tax office about the
entities whose registration as VAT payers has payment made to an account other than the one
been restored. included in the list within seven days from the date
of the payment being ordered. During the period of
The list is extended by the additional data (e.g.
the epidemic threat and the epidemic state
bank accounts numbers indicated in the tax forms
announced in connection with COVID-19, the
filed to the tax office).
deadline for submitting the notification about the
payment made to an account other than the one
included in the list is extended to 14 days from the
date of the payment being ordered.

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Split payment system in VAT settlements
VAT refunds
As of 1 July 2018, split payment mechanism in
The Polish VAT law allows direct refunds when
B2B transactions has been introduced into the
input VAT (available for deduction) exceeds
Polish VAT Law, replacing reverse charge for
output VAT.
selected groups of goods and services. It assumes
that the bank transfer is divided into net amount A Polish business may also be entitled to the
and VAT; the VAT amount is credited to a VAT refund owed by another country under
dedicated bank account of the seller. Cash certain circumstances. Likewise, a foreign
deposited in a VAT account can be used only to business having a seat or fixed place of business
pay VAT liability or other tax liabilities (CIT, PIT, for VAT purposes outside of Poland may be, in
excise duty, customs duty) and social security most cases, entitled to the refund of Polish VAT.
(ZUS) contributions or to pay the VAT shown on If the respective countries belong to the
acquisition invoices to the supplier’s VAT account. European Union, the procedure is substantially
Cash in a VAT account may only be sourced from simplified due to the EU Directive, which provides
VAT payments made by acquirers or refunds of favourable rules for businesses based in EU
VAT from tax authorities. countries that are seeking VAT refunds in other
EU countries (i.e. electronic VAT refunds are
A mandatory split payment mechanism for B2B
possible).
supplies of selected goods and services entered
into force on 1 November 2019. Obligatory split
payment applies only to transactions between International services
taxpayers, which are subject to VAT in Poland, The treatment of international services largely
documented by invoices in which the total amount depends on the place of supply since it is
of receivables exceeds PLN 15,000 (gross). determinative of whether particular services are
Foreign entities settling transactions by bank subject to the Polish VAT. The Polish VAT applies
transfers, subject to VAT in Poland, are required to only to those services that are supplied within
open a bank account in Poland. Poland.
The obligatory split payment mechanism applies to Reporting rules
150 product and service groups determined in
accordance with the Polish Classification of Generally, the VAT reporting period is one month;
Products and Services (PKWiU) of 2008. quarterly reconciliation of VAT may apply to small
taxpayers. VAT should be reported and reconciled
by the 25th day of the month following the VAT
reporting period. Legislation obligates the VAT-
In general, the following groups of goods and registered taxpayers (except those exempt from
services can be distinguished: VAT) to keep computerised records of all data
required to fulfill reporting obligations. Documents
• Steel products, precious metals, non-ferrous
must be filed in the Standard Audit File for Tax
metals
(SAF-T) format, both in the case of an inspection
• Waste, scrap, recyclable materials and with respect to the VAT records.
• Electronics, specifically processors, From 1 October 2020, entrepreneurs are required
smartphones, phones, tablets, netbooks, to submit VAT SAF-T files in the extended version,
laptops, game consoles, inks, toners, hard including information from the VAT return (V7M,
drives VDEK).
• Fuels for cars, fuel and lubricating oils With the introduction of VDEK, the obligation to
submit VAT returns in their previous form was
• Greenhouse gas emission rights
abolished.
• Building and constructions services
VAT group
• Coal
The option to form a VAT group, newly introduced
• Sale of car and motorcycle parts to the Polish tax system (available to taxpayers as
of 2023) is discussed in the Group taxation
section.

PwC 35
Accounting and audit

Accounting requirements
According to the Polish Accounting Act the books The Company’s ERP system should be able to
of accounts shall be kept in an accurate and produce an XML Standard Audit File for Taxes in a
verifiable manner, without errors and on an up to specific structure published by the tax authorities
date basis. Accounting books have to be kept in (JPK_KR), which includes the accounting books of
Polish currency (PLN) and in Polish language, a Company, namely Trial Balance, Journals and
meaning that the Chart of Accounts and individual accounting entries made in General
descriptions of transactions recorded in the Ledger and sub-ledgers. Such a file may be
accounting books should be kept in Polish requested by the tax authorities during a tax audit
language. Companies should also have an or tax proceedings.
Accounting Policy drawn up and approved by the
The Polish Accounting Act requires that the
Management Board in place. Polish accounting
accounting books are stored for a period of five
and tax law gives specific requirements for
years, counted from the end of the year in which
exchange rates that are to be used when
they were approved.
translating amounts expressed in foreign
currencies into PLN for accounting books and for
tax purposes.

Annual Statutory Financial Statements

Annual Statutory Financial Statements have to be The Polish Accounting Act allows for a simplified
prepared in Polish language. The deadline for version of the Statutory Financial Statements to be
preparation is three months after the end of the drawn up by micro entities and small entities. In
financial year. The deadline for approving the order for micro entities and small entities to benefit
Statutory Financial Statements by shareholders of from this opportunity, an appropriate resolution
the Company is six months after the end of the needs to be taken by
financial year. Approved Statutory Financial
the shareholders of the Company. The Accounting
Statements have to be submitted to the National
Act defines small entities as entities which during
Court Register within 15 days of approval or within
the financial year for which they draw up the
15 days of the deadline for approval, whichever is
Statutory Financial Statements, and during the
earlier.
preceding year, did not exceed more than one of
The Statutory Financial Statements have to be the following three values:
prepared electronically in an XML format in a
17 000 000 PLN for total balance sheet
specific format published by the Ministry of 1
asset value at the end of the financial year
Finance. As such, they need to be signed by all
Management Board Members of the Company 34 000 000 PLN for net revenues from sales
2
using qualified electronic signatures. of goods and products for the financial year
50 persons for average annual full time
3
employment

PwC 36
Audit requirements
Annual financial statements for most entities are
audited if in the financial year preceding the year
for which the Statutory Financial Statements are
prepared the entity fulfilled at least two of the
following three conditions:

1 2 3

Average annual full time Value of total assets at the Net revenues from the sales
employment was equal to end of the financial year was of products and goods, as
or exceeded 50 persons equal or exceeded well as financial transactions
EUR 2 500 000 for the financial year were
equal to or exceeded
EUR 5 000 000

The amounts in EUR have to be translated into

equivalent in PLN at the exchange rate published
by the National Bank of Poland as at the end of the
preceding financial year.

PwC 37
Who we are

About us
PwC is an independent member firm of a global In Poland the firm has been operating since 1990
network in 157 countries with more than 276,000 and currently employs more than 6,000 people, of
people who are committed to delivering quality in which over 1000 are technology experts in all lines
assurance, advisory and tax services. of services. Our team is always close to the client,
operating in 9 offices across the country: Warsaw,
At PwC, our purpose is to build trust in society and
Krakow, Wroclaw, Poznan, Katowice, Gdansk,
solve important problems. It is this focus which
Łódź, Opole, Lublin. We support annually 4900
informs the services we provide and the decisions
entities - both multinational corporations (55% of
we make. Our objective is to determine the right
our services are export services) as well as family
business strategy for our client and make sure that
businesses.
we deliver the best and most relevant technology
to achieve this strategy through adaptability and
innovation.

Advisory

As PwC's Advisory practice we help our clients

implement their strategic initiatives. Working in
teams of leading experts with extensive
professional experience, we provide our
clients with high-end advisory services within
the following areas: strategy development,
implementation and measurement, operational
excellence, product development and pricing,
financial processing and restructuring,
transactions, forensic services, technology,
digital solutions, data analytics, and other – all
of those combined with sector expertise.

PwC 38
 Tax & Legal

PwC is one of the largest tax advisory firms in Complex projects/campaigns such as Tax
Poland. We hire almost 500 tax experts, Security, Tax Function of the Future,
including over 130 certified tax advisors, legal employment market gap, pro-family policy of
counsels, advocates and statutory auditors. We the European Union states or Paying Taxes
support over 4000 entities annually. are combined with the every-day education in
different areas of taxes and law. To promote
Our main areas of focus include: Transfer
the content we use number of channels such
Pricing, Indirect Tax, International Tax,
as media, webinars, events, website, mailing,
Litigation and Dispute resolution, Human
podcasts, social media, videos as well as
Resource Services, Tax Management and
mobile application called Espresso. All this
Accounting, Digitalization of Taxes and Legal.
activities result in #1 share of voice position
We work for all industries, with a priority focus
(study by the independent company) - both in
on Financial Services, Real Estate,
traditional media and the internet.
Retail&Consumer, Pharma&Healthcare, Energy
and Public Sector.
Our market position has been recognized in the
most important business rankings. We have
been ranked #1 in the Dziennik Gazeta Prawna
daily ranking of tax advisors and received
numerous awards in Rzeczpospolita tax and
legal rankings.

Assurance

As the world’s leading audit company, we have

the best knowledge resources and sector
experience in order to ensure the top quality of
our comprehensive audit of financial
statements. By applying an individual
approach, which is tailored to the specificity of
operations conducted by our clients, and by
utilizing the knowledge and expertise of our
employees, we offer services based on the
principles of quality, transparency and
integrity. PwC globally applies a uniform audit
methodology, founded on the ideas of
reliability and independence as well as value
added for a client.
With Broader Assurance Services we are
supporting clients in areas related to internal
controls, risk management, cyber, financial
reporting and accounting advice as well as
support in initial process offerings.

PwC 39
 Maximizing the potential of NGOs
Non-governmental organizations (NGOs) work
where the public needs them most. By supporting
NGO leaders, we help build a stronger and more
transparent non-governmental sector, and thus we
support solving key social problems.
Our volunteers as coaches, mentors and trainers
strengthen the potential of both social
organizations and their leaders so that they can be
more effective in helping those most in need.
Every year we conduct pro bono audits for NGOs
with a total value of almost PLN 0.5 million. For
many years, we have been implementing the "Two
Sectors - One Vision" coaching program.
#socialimpact
Our community investments are an important part Social economy
of our efforts to help build trust in society and solve Social entrepreneurs use business tools and
important problems. In Poland in FY20 (July 2019 technologies to solve problems in their local
– June 2020), PwC supported both financially and communities. We share our knowledge to
by sharing knowledge and experience: strengthen and scale their activities. We are
• 9531 people committed to promoting and encouraging the
search for innovative solutions to existing social
• 144 NGOs& social enterprises challenges. Through partnerships in incubators
Last year 561 PwC employees were engaged in and acceleration programs, we help social
social activity and spent 5000 hours at innovators and create an environment to support
volunteering. creating new ideas.

By sharing PwC’s greatest assets – the skills, As part of volunteering, PwC employees:
knowledge and talent of our people – we focus on • are mentoring leaders of social enterprises as
education, building the capacity of NGOs and part of the mentoring program
supporting social enterprises.
• as part of the BIZnES Class Academy, they
Education support social economy entities to operate
more effectively on the open market and to
The labor market is changing. What and how we
implement an innovative product or service
learn should also change. Through our
investments in education and competence building • PwC is a long-term partner of the [eS]
- from financial skills to technical and mentoring - Przedsiębiorstwo Społeczne Roku im. J.
we help young people develop, preparing them for Kuronia. We support the competition financially
adulthood and work. and substantially.
We support the development of young people at
risk of social exclusion (e.g. from orphanages,
difficult environments, with disabilities).
As part of volunteering, PwC employees:
• provide tutoring in English and mathematics as
part of the Tutoring program,
• educate on air quality and smog as part of the
Biznes vs Smog program
• organize workshops, e.g. Cybersecurity - online
security, savoir vivre, "how to prepare for a job
interview" workshop.

PwC 40
COVID-19 On the one hand, PwC Foundation helps social
enterprises to survive this difficult economic time
Our #socialimpact, as a company and employees, by ordering products and services from them, and
has become particularly important at this point. In on the other hand, helps those who fight directly
2020, we support clients by taking actions, such against the epidemiological threat and its
as: free legal hotline or developing a crisis consequences.
package for companies.
• 20 000 certified surgical masks. The social
PwC Poland donated 300,000 PLN to hospitals in enterprise PANATO is sewing the masks, which
Cracow and Warsaw. we donated to the institutions and hospitals in
PwC has become a partner of "We Test - We need.
Support" program in Poland. We financed 4,000 • Over 1000 meals for hospitals prepared by
covid-19 tests for medical staff, which are social enterprises in 4 cities
implemented by medical labs "Diagnostyka
Group". • 1000 vizors manufactured by ManuMania
Social Cooperative, which we will donate to
As PwC Foundation, we support social enterprises medical personnel from selected hospitals
and the fight against coronavirus.
• 600 vizors - together with the Coder Dojo
Social enterprises provide i.e. catering, production Foundation, we got involved in the "Printers for
and services. They employ people who are at risk Hospitals" campaign.
of social exclusion e.g. with disabilities, recovering
from addiction or homelessness. We donate 100 used laptops to foster care
facilities - orphanages and foster families from all
over Poland. We work with our partner non-
governmental organizations and the Coalition for
Family Foster Care.

PwC 41
Contacts and links

PwC 42