POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
Social Security Contributions Health insurance contributions are paid by the employee at the rate of 9%. Social security con - tributions (to finance retirement, disability pen - sions and sick leave benefits) may total up to 29.97% – ie, 13.71% payable by the employee (as a non-deductible cost) and 16.26% pay - able by and tax-deductible for the employer. The basis for calculation of the retirement and disability pensions contributions is capped at PLN260,190 for 2025. Additional occupational accident contributions and some other social security contributions payable by and tax deductible for employers may apply, depending on the circumstances and the type of business and work carried out, and the number of employees employed by the employer. Generally, the contributions amount to the following: • for retirement – 19.52% of the basis of assessment; • for disability pensions – 8% of the basis of assessment; and • for sick leave benefits – 2.45% of the basis of assessment. Social security contributions may differ slightly from the above (eg, for accident contributions, the rate varies from 0.67% to 3.33%, with the accident contribution for a small company employing up to nine people being 1.67%). Payment of Tax and Reporting Duties The employer is obliged to calculate and remit the tax advances to the relevant tax office, and the health insurance and other social security contributions to the Social Security Office (ZUS). Employees are obliged to make annual tax filings (which may be done electronically). Employees
who do not intend to take advantage of any allowances or deductions and who settle under the general rules (tax scale at 12% and 32% rates) and only receive income settled through a remitter (eg, employer or principal) may leave the tax settlement to the tax office. 5.2 Taxes Applicable to Businesses Company Income Tax (CIT) Legal entities in Poland are obliged to pay CIT on their income in Poland, at the rate of 19%. A reduced 9% rate applies to taxpayers in the first year of starting a business and to those taxpay - ers whose annual income (including VAT) does not exceed EUR2 million. In respect of partnerships that are tax-trans - parent, tax is payable by partners (CIT for part - ners that are legal entities; PIT for individuals). Partnerships limited by shares and limited part - nerships are treated as CIT payers (ie, non-tax- transparent entities), with special tax reliefs for limited partners. The CIT Act provides for specific rules to deter - mine whether or not an item may count as a tax- deductible cost, and expressly identifies a list of items that cannot constitute tax-deductible costs. Certain allowances and reliefs may be available (eg, a 50% allowance in respect of the acquisition of new technologies). The tax basis is calculated separately for capi - tal gains (as defined in the CIT Act) and other incomes. “Minimal” CIT of 10% came into force in 2024. Therefore, an entity that has incurred an income loss (other than capital gains source) or whose tax yield in the basket of so-called operating profits does not exceed 2% is taxed at 10% of the taxable base. The CIT Act also provides for a
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