POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
• the registered share capital per participating com - pany in the group is not lower than PLN250,000 on average; • a parent company directly holds at least 75% of the shares in the remaining group members; • no group member is in arrears in respect of taxes; • no group member may benefit from any tax exemptions or reliefs; and • all transactions between the tax group members and their affiliates outside the tax group must be on an arm’s length basis. A written agreement to form a tax group for a period of no less than three tax years must be concluded and registered with the tax office. Members of the tax group are jointly and severally liable for the CIT liabili - ties of the group for the period during which the tax group agreement remains in force. If the status of a tax group is lost as a result of a breach of the applicable obligations, each participating company will have to adjust its tax filings for the three most recent tax years (as if the tax group did not exist) and, where applica - ble, settle any outstanding taxes. From 1 January 2026, Poland significantly improves the stability and attractiveness of tax capital groups (PGKs) under the CIT Act. The most important change is the abolition of the automatic loss of PGK status for non‑arm’s length transactions with related parties outside the group. While the arm’s length principle and transfer pricing controls still apply, a dispute over pricing no longer triggers the extreme sanction of dis - solving the entire PGK (including retroactively). This change also applies to past cases where no final deci - sion on deregistration had been issued before 2026, greatly reducing tax risk and increasing legal certainty for existing and new PGKs. In addition, 2026 brings greater flexibility and trans - parency. PGKs can be re‑established more smoothly after a regular expiry of the group agreement (without breaches), and the rules no longer force unnecessary waiting periods in such cases. At the same time, digital reporting obligations (JPK‑CIT) now fully apply: each company within a PGK must submit its own electronic accounting files, giving tax authorities deeper insight into intra‑group data. Finally, special rules ensure that higher CIT rates for banks cannot be avoided by plac -
ing banking income inside a PGK – only PGKs that include banks are affected, while non‑financial PGKs continue to be taxed at the standard 19% rate. 5.5 Thin Capitalisation Rules and Other Limitations Since 2022, taxpayers are obliged to exclude from tax-deductible costs the costs of debt financing for the part in which the excess of the costs of debt financing exceeds PLN3 million (this does not apply to debt financing costs associated with obtaining funding from a family foundation, directly or indirect - ly) or 30% of taxable EBITDA. In addition, the costs of debt financing obtained from affiliated entities are not regarded as a tax-deductible expense for the part in which they were earmarked directly or indirectly for capital transactions, particularly the purchase or acquisition of shares (stock), the acquisition of all rights and obligations in a partnership without legal personality, additional contributions, share capital increases or the purchase of own shares for redemp - tion. Costs that are not deducted in a given year due to the above mechanism may be carried forward for up to five consecutive tax years. 5.6 Transfer Pricing In Poland, transactions between related parties (defined on the principle of a 25% ownership stake interpreted broadly, including not only shares but also, for example, certificates in investment funds or simi - lar instruments) should be done on an arm’s length basis. Where applicable, transfer pricing documenta - tion must demonstrate that all relevant transactions have been executed on terms that would have been applicable to unrelated parties. The requirement to prepare the transfer pricing docu - mentation applies in respect of transactions with a value of: • PLN10 million for commodity and financial transac - tions; and • PLN2 million for services and other transactions not included above. Lower thresholds of PLN2.5 million in the case of a financial transaction and PLN500,000 in cases other than a financial transaction apply to transactions with
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