POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
Polish CIT provides for several tax reliefs and exemp - tions for specific business types. In addition, tax capital groups and entities whose rev - enues exceed EUR50 million are obliged to prepare and publish information about their tax strategy. Poland implemented the Pillar 2 directive on 1 Janu - ary 2025 and introduced three new taxes: a global minimum tax, a domestic minimum tax and a top-up tax on undertaxed profits. The purpose of the global minimum tax is to level the tax rules for the largest multinational companies. New obligations will be applied to domestic and international companies that are part of capital groups and had a total annual rev - enue amounting to at least EUR750 million in two of the last four financial years. Such companies will need to calculate their effective tax rate for this timeframe, and will face additional taxes if it will fall below the 15% minimum level of taxation. The top-up tax will be the difference between the minimum rate and the effective tax rate in a particular jurisdiction. JPK-CIT (Poland’s Standard Audit File for Corporate Income Tax) is a mandatory annual digital tax report that companies must file with the tax authorities, along with their corporate income tax returns. It requires businesses to submit a standardised electronic extract of their financial records (accounting books) for the tax year, making corporate tax filings easier to review and verify by the tax office. Taxation of Sole Traders Individuals running businesses as sole traders (for which certain requirements need to be met) may elect whether to pay taxes in the following manners: • according to the same rules and rates as employ - ees (except the actual tax-deductible costs, subject to statutory limitations similar to those applicable to CIT payers, would apply instead of lump sums); • at a flat rate of 19%; or • according to special rules, in respect of some types of smaller businesses (eg, a lump sum of 2% to 17% of gross income or by means of the so- called tax card, where the amount of tax is a lump sum payable irrespective of income or profit).
From 1 January 2022, the basis of assessment for health insurance contributions is determined depend - ing on what type of business activity the remitter conducts and what form of taxation is applied to the income from that activity. Any person conduct - ing business activity who pays social contributions for their own insurance was required to submit an annual health insurance contribution return for the first time in 2023. For example, for an individual running a business as a sole trader who settles tax based on a tax scale for January 2026, the lowest contribution assessment basis is PLN5,652, and the minimum con - tribution is PLN432.54. The new amount of the minimum wage (PLN4,806) will be the lowest contribution base only for the contribu - tions due for January 2026, and will be in effect until January 2027. Withholding Tax Polish income tax laws provide for withholding tax on payments made to non-Polish residents at the rate of: • 20% on interest, royalties and certain services (eg, legal, advisory, management, data processing, HR and financial services); and • 19% on dividends and other capital gains and interest payable to individuals on some debt instru - ments. Lower rates or exemptions from withholding tax may apply if provided for under bilateral treaties. Moreover, under the provisions of the Parent-Subsidiary Direc - tive and the Interest and Royalties Directive (which have been implemented into the Polish tax system), dividends, interest and royalties payable to a company with its registered office in an EU country are, in prin - ciple, exempt from withholding tax, provided that the company receiving the interest (its beneficial owner) holds at least 10% (in the case of dividends) or 25% (in the case of interest and royalties) of the shares in the company making such payments for at least two years. This holding period may end after the payments have been made. The tax remitter is obliged to act with due care when verifying the requirements to apply such lower rates
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