POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
number of other exemptions from the ”minimal” tax for certain entities. Polish CIT provides for several tax reliefs and exemptions for specific business types. In addition, tax capital groups and entities whose revenues exceed EUR50 million are obliged to prepare and publish information about their tax strategy. Poland implemented the Pillar 2 directive on 1 January 2025 and introduced three new taxes: a global minimum tax, a domestic minimum tax and a top-up tax on undertaxed profits. The pur - pose 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 revenue amount - ing 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 time - frame 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 par - ticular jurisdiction. 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 employees (except the actual tax-deductible costs, subject to statutory limitations simi - lar 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 depending on what type of business activity the remitter conducts and what form of taxation is applied to the income from that activity. Any person conducting 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 2025, the lowest contribution assessment basis is PLN3,499.50, and the mini - mum contribution is PLN314.96. The new amount of the minimum wage (PLN4,666) will be the lowest contribution base only for the contributions due for January 2025, and will be in effect until January 2026. 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 ser - vices (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 instruments. Lower rates or exemptions from withholding tax may apply if provided for under bilateral treaties. Moreover, under the provisions of the Parent-
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