Corporate Income Tax in Poland

Corporate Income Tax (CIT) in Poland is a crucial element of the national tax system and applies to both domestic and foreign companies generating income in Poland. Whether you are planning to launch a business or expand operations into the Polish market, understanding how corporate income tax in Poland operates is essential for entrepreneurs launching or expanding operations in the country.

This guide covers key aspects of corporate income tax in Poland, including tax rates, minimum income tax, the Estonian CIT model, tax base, and filing obligations.

Who Is Subject to Corporate Income Tax in Poland?

Entities subject to corporate income tax in Poland include:

Polish companies (limited liability companies, joint-stock companies)
Branches of foreign companies located in Poland
Polish tax residents – taxed on global income
Some Non-residents – taxed on income earned in Poland

Foreign businesses with a permanent establishment in Poland are also required to pay corporate income tax on their income sourced in the country.

Corporate Income Tax Act: https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU19921190649

Corporate Income Tax Rates in Poland (2025)

Poland’s corporate income tax (CIT) system in 2025 offers several taxation options tailored to different business profiles.

Standard CIT Rate

19%: This is the standard CIT rate applicable to most companies operating in Poland.

Reduced CIT Rate for Small Taxpayers

9%: Available to small taxpayers and new businesses meeting specific criteria:
- Annual revenue (including VAT) not exceeding the PLN equivalent of EUR 2 million in the previous fiscal year.
- The company is not part of a tax capital group.
- The company was not formed through certain restructuring activities, such as mergers or divisions.

Note: The reduced rate applies only to income other than capital gains.

Estonian CIT (Lump-Sum Taxation on Corporate Income)

Poland offers an alternative taxation method known as the Estonian CIT, which allows companies to defer taxation until profits are distributed.

Eligibility:
- Limited liability companies and joint-stock companies.
- Annual revenue not exceeding PLN 100 million.
- Shareholders are exclusively natural persons.
- The company does not hold shares in other entities.
- The company employs at least three full-time employees who are not shareholders.
Tax Rates:
- 10% for small taxpayers and new businesses.
- 20% for other qualifying entities.

Under this system, CIT is paid only upon profit distribution, encouraging reinvestment and simplifying tax compliance.

Withholding Tax (WHT) on Dividends

19%: Standard WHT rate on dividends paid to both residents and non-residents.
Applicable tax treaties may provide for reduced rates.

Summary Table

Taxpayer Category	Applicable CIT Rate
Standard taxpayers	19%
Small taxpayers (revenue ≤ EUR 2 million)	9% (excluding capital gains)
Estonian CIT – small taxpayers/new businesses	10% upon profit distribution
Estonian CIT – other qualifying entities	20% upon profit distribution
Withholding tax on dividends	19% (subject to tax treaties)

For more detailed information on corporate income tax rates and regulations in Poland, you may refer to the official resources provided by the Polish Ministry of Finance.

https://www.biznes.gov.pl/en/portal/004645

What Is Estonian CIT in Poland?

The Estonian CIT system (also known as lump-sum taxation on corporate income) allows companies to pay tax only when profits are distributed (e.g. as dividends). It is available to:

Limited liability companies and joint-stock companies,
Companies with < PLN 100M annual revenue,
Companies where shareholders are only natural persons.

Benefits include:

0% CIT as long as profits remain in the company,
Deferred taxation until profit distribution,
Simplified accounting and tax obligations.

This system encourages reinvestment and liquidity among Polish SMEs.

The Minimum Corporate Income Tax in Poland

Introduced in 2022, the minimum corporate income tax in Poland targets companies with low profitability or no declared profit, to limit tax base erosion through aggressive optimization.

When Does Minimum CIT Apply in Poland?

The minimum income tax applies to companies that meet both of the following conditions:

The share of income in revenue is below 2% (low profitability)
The company does not qualify for any exemptions

This tax is due regardless of whether the company shows a profit, making it a form of alternative taxation.

Who Is Exempt from the Minimum CIT?

Exemptions from the minimum income tax include:

Start-ups (first 3 tax years of operation)
Small taxpayers (revenue below EUR 2 million annually)
Financial sector entities (e.g., banks and insurers)
Companies with simple ownership structures or no related-party transactions

How Is the Minimum Tax Base Calculated?

According to the general rule, the tax base is the sum of:

1.5% of revenue in the tax year (excluding capital gains),
The excess of debt financing costs (from related parties) over 30% of EBITDA,
The excess of costs for intangible services and acquisition of rights incurred during the tax year in favor of related parties or entities from “tax havens” (Article 11j(2) of the Corporate Income Tax Act) over the amount of PLN 3 million plus 5% of EBITDA.

According to Article 24ca(3a), the taxpayer may choose a simplified method for determining the tax base for the minimum income tax. In that case, the tax base is 3% of the revenue in the tax year from sources other than capital gains.

Minimum Income Tax Rate in Poland

Component	Rate or Rule
Minimum tax base	4% of revenue + specified adjustments
Minimum CIT rate	10% (applied to the calculated tax base)
Payment obligation	Even in case of loss or low profitability
Offset mechanism	Can be deducted from future standard CIT dues

Companies subject to minimum CIT must calculate and report it in their annual tax return (CIT-8), even if they are also subject to regular CIT.

More information and legal references are available at the Polish Tax Portal.

CIT Year, Deadlines, and Filing Obligations

The tax year in Poland usually aligns with the calendar year but can be adjusted by the taxpayer.

Key CIT compliance deadlines:

Advance tax payments – monthly or quarterly,
Annual CIT return (CIT-8) – filed by the end of the third month of the following tax year,
Final payment of tax due – same deadline as return filing.

Polish taxpayers must maintain accurate books and determine the tax base following Polish tax law. This includes total revenue minus tax-deductible costs, adjusted for non-taxable items.

Tax-Deductible Expenses and Loss Carryforward

CIT taxpayers in Poland can deduct a wide range of business-related expenses, including:

Salaries and wages,
Depreciation and amortization,
Rent, utilities, travel,
Business-related services.

Tax losses can be deducted in:

the five consecutive tax years, provided that the amount deducted in any of those years does not exceed 50% of the loss, or
one of the next five consecutive tax years, provided that the one-time deduction does not exceed PLN 5 million (the excess over PLN 5 million may be deducted in the remaining years of the five-year period, but it cannot exceed 50% of the total loss incurred).

International Aspects and Tax Treaties

Poland has signed over 90 double tax treaties, which:

Prevent double taxation on income earned across borders
Reduce withholding tax rates on dividends, interest, and royalties,
Define permanent establishment rules.

Use of these treaties must be supported by proper documentation and certificate of tax residence from the relevant country.

How in Poland CIT Base Is Determined After Preparing the Profit and Loss Statement in Poland

In Poland, the calculation of corporate income tax (CIT) does not rely solely on the financial result presented in the profit and loss account. While the net profit or loss derived from the accounting records is the starting point, it must be adjusted according to tax regulations in order to determine the actual tax base.

Here is a step-by-step explanation of the process:

Start with the accounting result (net profit/loss)
The company first prepares its profit and loss statement in accordance with the Polish Accounting Act or IFRS (if applicable). This results in a net accounting profit or loss for the financial year.
Adjust for tax-deductible and non-deductible costs
Polish tax law defines what constitutes a tax-deductible cost. Some expenses recognized for accounting purposes (e.g., representation costs, penalties, certain provisions) are not deductible for tax purposes and must be added back to the profit. Conversely, there may be costs that are deductible for tax purposes but not yet recorded in the profit and loss account (e.g., accrued but unpaid interest).
Include tax-exempt income and add taxable income not in the P&L
Some revenues shown in the accounting profit may be exempt from taxation (e.g., certain dividends or grants). These must be excluded from the tax base. On the other hand, there may be income not yet included in the profit and loss account that must be added for tax purposes.
Depreciation and amortization differences
Fixed assets may be depreciated differently for accounting and tax purposes. The CIT base must reflect tax depreciation rules, which often differ in terms of rates and methods from those used in accounting.
Adjust for previous year tax losses
If the company has tax losses carried forward, a portion of those losses (up to 50% per year) may be deducted from the current year’s tax base.
Final calculation
After applying all necessary tax adjustments to the net profit or loss, the result is the taxable income (or tax loss) for CIT purposes. The applicable CIT rate (usually 19% or 9% for small taxpayers) is then applied to determine the final corporate income tax due.

In summary, while the profit and loss statement provides a foundation for CIT calculation, the tax base is determined independently based on tax law, requiring careful reconciliation of accounting figures with tax regulations. This ensures accurate and compliant corporate tax reporting.