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Tax Specialist Group
Corporate Tax Guide: Poland
Poland

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The information is valid for the entire country except where indicated. For example, in the case of Malaysia, Labuan is part of Malaysia but has a special tax regime, so this is noted.
Poland – entire country.
The corporate tax rate shown is the typical corporate tax rate that a domestic corporation owned by non-resident persons would pay. The tax rate does not include withholding tax on dividends, but does include a distribution tax shown separately if applicable. Certain countries have a low corporate tax rate, but charge an additional tax when a dividend is distributed. Because this tax is paid by the corporation, and not deducted from the amount of the dividend itself, it is not a dividend withholding tax. As a result, it typically cannot be reduced by an international tax treaty.
19% - flat rate.
The basis of taxation for a corporation will typically be one of:
  • World income (i.e. income from all sources)
  • Territorial (i.e. only income from within the jurisdiction)
  • Territorial and remittance (income earned within the jurisdiction and income remitted into the jurisdiction)
Other basis of taxation are possible, and, if applicable, they are noted.
Worldwide for tax residents.
Where non-resident corporation carries on business in a country, business profits may be subject to corporate tax. In addition, a branch profits tax may apply in lieu of dividend withholding tax. This branch profits tax applies to the after tax profits, typically at a fixed percentage. An international tax treaty may reduce the rate of branch profits tax, typically to the rate provided for dividend withholding.
Profits of the branch are taxed with 19% rate. No tax on branch profit distribution.
The common forms of business entity are noted. In addition, the entities which are flow through entities for U.S. tax purposes are indicated.
Limited Liability Company, Joint-Stock Company, General Partnership*, Limited Liability Partnership*, Limited Partnership*, Limited Joint-Stock Partnership.

*Transparent for tax purposes.
Capital gains may be fully taxed, partially taxed or not at all. In certain countries, an exemption, called the participation exemption, will apply to exempt from tax a capital gain from disposition of a substantial holding of shares of a subsidiary. Where a participation exemption is applicable, it is noted together with a summary of the main conditions.
Gains on the disposal of investment assets are subject to a special tax regime, Such gains are not accumulated together with other incomes and are taxed separately at a flat rate of 19%.
Certain countries allow group taxation, otherwise known as consolidated tax filing. Here the tax returns of a group of corporations in the country may be combined together, which can be useful. If group taxation is permitted, it is noted along with the main conditions.
Yes. CIT law provides group taxation rules. Provided certain requirements are met, a group of Polish companies may establish a tax capital group, treated as a single corporate taxpayer.
Countries offer various kinds of special exemptions and incentives. Examples are a reduced tax rate, a tax holiday, a tax credit on the purchase of equipment, special accelerated deductions for deprecation, incentives for R&D, and various others. Here the major items are noted.
  • Reduced tax rate: on companies classified as so-called small taxpayers (15%)
  • R&D: expenditures can either be deducted in the year when they are incurred or through tax write-offs
  • Revenues derived from activity in Special Economic Zones (SSE) are exempt up to a certain level (depending on amount invested and workplaces created).
  • A company can deduct expenses on the purchase of new technology. The technology is considered new when its usage life worldwide is not older than five years (to be verified by independent scientific entity). The technology relief is up to 50% of expenses incurred on the purchase.
Many countries have thin capitalization rules which limit or deny the deduction of interest expense in certain circumstances. For example, if debt exceeds three times equity, a proportionate amount of interest expense may not be deductible. Limitations take various forms, restricting the interest expense deduction to a percentage of profit, deeming the debt to be equity and the interest to be a payment of dividends, and various other rules which may blend of these principles. Where a country has thin capitalization rules, they are briefly described.
Yes, applicable on interest expenses arising in the specific tax period.
All resident business entities and non-resident business entities having a PE in Poland, being the direct or indirect shareholders (25% of shareholding), are covered. The deduction of interest expenses (including other related expenses) on loans from related parties exceeding paid equity (1:1 debt to equity ratio).
Many countries have transfer pricing rules. They very often follow the OECD guidelines and the arms length principle. Some countries have specific rules which apply in certain cases. In addition, some countries allow for a selection of the most appropriate transfer pricing methodology in the circumstances, while other countries follow a hierarchy of methods, with the CUP method (comparable uncontrolled price) often ranking first. The transfer pricing rules are briefly explained.
Yes.
Starting from 1 January 2015, the transfer pricing rules also apply to partnerships and consortiums between related parties.

Until 31 December 2014, transfer pricing rules applied only to transactions concluded by residents with foreign related parties.

Mandatory transfer pricing documentation requirements exist, which generally follow the recommendations contained in the OECD Guidelines on Transfer Pricing and the EU Code of Conduct on Transfer Pricing Documentation.
Many countries tax passive income earned in controlled foreign corporations (CFC’s) on an imputation basis while active income is not taxed. Such CFC rules are usually complex and vary significantly in what is considered passive income, and how foreign tax paid is taken into account. Some countries approach CFC rules on the basis of whether or not the foreign corporation is resident in a low tax jurisdiction or a tax haven. This may be done through a black list of countries.
The general overview of CFC rules is described in simple terms.
Yes. Applies to income of a controlled foreign company (foreign company controlled by a Polish entity). A subsidiary would be considered as CFC if any of the following requirements are met: (1) the subsidiary is located in a country that is on the “Black List”; (2) the subsidiary is located in a country that does not engage in exchange of information with PL or EU; (3) the Polish company owns a shareholding of at least 25% of the foreign company that derives mainly a passive revenue and at least one of the types of passive revenue is taxed at a rate lower than 14.25%.

CFC rules do not apply for foreign subsidiaries conducting an active business activity or if the revenue of the foreign company is lower than EUR 250,000 per year.
Profits repatriated by way of dividends from a subsidiary to a parent company are typically taxed in one of three ways:
  • The dividends are exempt of tax.
  • The dividends are deductible from taxable income, but not fully (90%, for example, of the dividend is deductible).
  • The dividend is taxable, grossed up to the pre-tax amount, and a foreign tax credit claimed for foreign taxes paid.
The applicable method is noted.
Complex system. Four components.
  • Dividends exempt: active business source in treaty country or country with TIEA.
  • Dividends taxable: active business source but non-treaty, non-TIEA or income under CFC rules.
  • Dividends 50% exempt, 50% taxable: distribution of dividend from tax-exempt gain realized by subsidiary on sale of shares of another subsidiary.
  • Dividends produces capital gain if not capital proceeds: in categories above.
Most countries allow a foreign tax credit based on a formula, typically net foreign income over the net income times taxes payable. This limits the foreign tax credit to roughly the domestic tax otherwise applicable to the foreign income. There are numerous variations and technical rules in the details of foreign tax credit calculations. Where a foreign tax credit is allowed, the general principles are described.
Yes. Poland has a broad network of double tax treaties. Polish domestic tax regulations also provide methods to avoid double taxation of income taxed by a third country.
14. Losses
Losses typically can be carried forwards for a period of years, and sometimes can be carried back. Losses may be segregated into capital losses and non capital losses.
Losses relief: Carryforward: five years; Carryback: No;
It is not practical to list all of the tax treaties which a country has in a simple guide like this. Accordingly, a link is provided in each case to the tax treaties.
Some countries have entered into Tax Information Exchange Agreements (TIEA).
Treaties are more and more containing provisions that limit benefits (LOB provisions).
Yes.
  • Income Tax: 93
  • TIEA: 15
  • LOB provisions: PL-US treaty, signed but not in force yet.
Withholding tax rates vary considerably from treaty to treaty, and countries may have domestic exemptions applicable in certain circumstances (for example copyright royalties, interest paid to arm’s length persons, etc.). A table shows the typical rates but cannot adequately summarize all of the details. The applicable treaty should be consulted.
TREATYNON-TREATY
Interest0% - 15%20%
Dividends*0% - 15%19%
Royalty0% - 15%20%
*Dividends payments to EU/EEA/SWISS parent companies are exempt, subject to: minimum threshold of 10% and minimum holding period of two years.
Some countries allow for the selection of year-end while other countries specify a particular year-end which all business entities must have. Normally the taxation year cannot exceed 12 months. Where it can exceed 12 months, this is noted.
Calendar year or other 12-month period. Any year-end is available by choice.
This is the due date for filing a tax return. Where extensions are available, this is noted.
Due three months after year-end. Any outstanding tax liabilities shall be settled by that time.
No extensions.
The typical tax instalment requirements are noted.
Yes, typically monthly or quarterly based.
This is the date when the corporate tax owing for the year must be paid. It may be different from the tax return filing due date.
Due three months after year-end.
This is the period after which the tax department cannot in normal circumstances reassess a taxation year. It is sometimes referenced to the end of the taxation year and sometimes to the date of the first assessment of that taxation year.
In general, the transactions are subject to the statute of limitations after five years from the end of the year in which tax returns concerning those transactions were filed (i.e., effectively six years).

This general statute of limitations period can be either interrupted or suspended under certain circumstances.
If a country has exchange controls, this is noted, together with the main requirements.
No.
23. VAT
A VAT tax system typically provides that the supply of goods and services is classified as taxable, tax exempt, or zero rated. Where a business is engaged in an activity which is taxable, it must charge VAT on its revenue, and can claim a refund of VAT on its expenditures. Where the activity is exempt, it does not charge VAT on its revenue, and cannot claim back VAT paid. Where the entity is engaged in activities which are zero rated (typically agriculture, food services and exports), then it can claim back VAT which it has paid on its expenditures, and does not charge VAT on its revenue.
If a country has a typical VAT system, this is noted. If a country has no VAT system but a sales tax system, this is indicated. Some countries may have a mixture, and taxes may apply at different levels (federal and state for example).
Yes, depending on the type of goods or services, the rate may vary from 0% to 23%.
Stamp duty, or land transfer tax, can apply on such things as the transfer of shares, land, or the issuance of bonds or debentures. This is described together with the applicable rates.
Stamp duty is imposed on certain activities undertaken by public authorities. There is no separate land transfer tax; the activity of land transfer might be subject to corporate income tax.
If capital tax is payable, this is described. Capital tax may apply in specialized industries, such as banking and insurance, even if a country does not generally apply a capital tax to corporations.
A tax on civil law transactions is levied on certain type of contracts, including sales or exchanges of goods or rights, loans, donations, life state deeds, mortgages, establishment of usufruct, partnerships or company deeds. The rates of tax vary, depending on the type of contract, between 0,5% to 2%. Certain number of exemptions or exclusions apply.
Where significant, other taxes are noted.
Real estate tax, customs and excise duties, environmental taxes, taxes imposed by municipalities, such as road vehicle tax, agricultural tax.
Anti-Avoidance Rules take many forms, the most common ones are a general anti-avoidance rule, treaty shopping limitations, the requirement for economic substance (or a business purpose in carrying out transaction) and specific anti-avoidance rules for particular purposes. A very brief overview of the anti-avoidance rules is described.
Yes. Under the general anti-avoidance rules, a transaction that was performed mainly to obtain a tax benefit, in given circumstances contradicting the object and purpose of the tax law, shall not result in a tax benefit, if the manner of actions was artificial.

Specific ant-avoidance rule / Anti Treaty Shopping Provisions:
Tax neutrality will not apply to a merger or division if the transaction is not justified for economic reasons, but was performed to avoid tax.
Tax exemption on dividends received by Polish resident companies from EU/EEA/Swiss subsidiaries does not apply if the amounts of paid dividend are tax deductible for the distributing company.

Economic Substance:
No express concept of economic substance.
Where a non-resident person holds shares of a corporation established in the country listed, the capital gain which results may be taxable or not taxable depending on the circumstances and, possibly, the existences of an international tax treaty. The general rules are noted.
In general, the sale of shares by a non-resident is taxable in Poland, however, under certain double tax treaties, such transactions may be taxed in the country of the seller.
Where a corporation is acquired through the purchase of shares, sometimes a step up is allowed so that the cost of its assets can be revalued. The main rules are briefly summarized.
Step up available upon share exchange. Tax neutrality of shares exchange will not be applicable if one of the primary aims of the tax transaction is tax avoidance. This means the step up in the tax value of shares as the result of shares exchange will no longer be available in cases where the transaction lacks commercial reason.
In some countries, rulings are commonly used (and sometimes even required). In other countries the system is either unavailable or not commonly used except in special circumstances.
Two types of rulings are available: general and individual. General rulings may be applied by all taxpayers. Individual rulings, which might be relied upon only by the taxpayer obtaining the ruling, are issued upon prior written request.
Generally the issued tax rulings cannot be challenged, except the rulings issued prior to GAAR entering into force (15 of July 2016) if the tax benefits were achieved starting from 1 January 2017.
31. Other
Other important aspects of the tax system are noted.
Full CIT exemption available to Polish open-ended (FIO) and specialist close-ended (SFIO) investment funds, except SFIO applying investment principles and limitations relevant for close-ended funds (FIZ). Comparable EU-based investment funds meeting certain criteria will also benefit from CIT exemption