Corporate Income Tax (CIT) in Poland

Scope

Every company that has its registered office or management board here in Poland is subject to corporate taxation on their total income. Such companies are automatically regarded as residents for tax purposes.

Legal entities, that do not have offices or management boards within Polish territory are subject to CIT exclusively on income generated in the Republic of Poland.

There are no local income taxes to be paid in Poland, in addition to central government taxes.

In particular, the following legal entities are subject to Corporate Tax in Poland:

• limited liability companies — Spółka z ograniczoną odpowiedzialnością (Sp. z o.o.)
• joint-stock companies — Spółka Akcyjna (S.A.)
• limited joint-stock partnerhips — Spółka komandytowo akcyjna (provided that its registered office or management board is located in Poland);
• corporations in the process of formation;
• tax capital groups, and a couple of others.

The standard corporate tax rate in Poland — 19%, however reduced rate of 9% may be available to some some entrepreneurs, whose annual turnover does not exceed €1,200,000.

Bear in mind: lately the Polish tax system has been subject to a couple of fundamental changes for new tax payers and newly registered businesses with small incomes.

In January 2017 a lowered 15% tax rate was introduced for so-called small taxpayers, however such rate is no longer valid. As of 2019 the new preferential 9% rate replaced the old 15%, that was applicable throughout 2017-2018.

Foreign companies that wish to enter the Polish market may use the reduced rate as well: when it comes to taxation, the same rules apply as those for Polish nationals.

Be advised: the reduced rate of 9% cannot be applied to companies, that wish to provide financial services.

Corporate Income Tax should be paid in monthly advance installments for the preceding month.

Tax base

In accordance with the Polish Corporate Income Tax Act, the tax base is the overall income, which is the difference between the taxable revenue obtained by the company and tax-deductible expenses. 

It should be noted, that there is no special treatment for income such as capital gains (calculated by deducting sale-related costs and expenses), as earnings from the sale of shares and other securities are subject to the same 19% Corporate Income Tax.

The same principles apply for earnings from the sale of real estate, that are taxed at the standard tax rate, unless a specific exemption applies.

Filing

All Corporate Income taxpayers are obliged to keep accounting records under the respective governing laws, mainly in accordance with the Accounting Act (Dziennik Ustaw [Journal of Laws] 1994, No 121, item 591, as amended).

Annual tax return CIT-8 form must be filed by the end of third month following the tax year-end, i.e. by the 31st of March.

All tax documents, such as tax declarations or tax returns must be submitted to the relevant tax authorities via electronic means. The said CIT-8 must be submitted via electronic communication as well.

Furthermore such forms must be digitally signed: either with an electronic signature or with a valid “qualified certificate”, using the so-called ePUAP trusted profile.

The easiest way to obtain the so-called trusted profile is to do via your online banking system, provided that your bank received your Polish PESEL identification number beforehand.

One will be assigned to you automatically, when you register your address of residence at the local municipal office.

Another option is to get a verified signature from one of the subject authorised to grant them. For instance — the „Szafir” electronic signature is issued by the Polish National Clearing House — Krajowa Izba Rozliczeniowa (KIR).

Please remember, that such subjects are required by the law to verify and confirm the identity of the person applying for an electronic signature.

Do not forget: tax authorities may impose penalties on the company for failure to comply with the provisions, for late filing of a tax return, and if the tax is outstanding.