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Extensive changes in Polish tax law as of 1 January 2022

With the si­gna­ture of the Po­lish Pre­si­dent on 15 No­vem­ber 2021, a tax re­form ("Po­lish Or­der") was ad­op­ted, which con­ta­ins ex­ten­sive chan­ges to Po­lish tax law and will mostly come into force as of 1 Ja­nu­ary 2022. The fol­lo­wing ar­ti­cle pres­ents some of the most im­port­ant chan­ges to Po­lish cor­po­rate tax law.

For a large num­ber of Po­lish com­pa­nies (or Po­lish per­ma­nent es­ta­blish­ments of for­eign com­pa­nies), the in­tro­duc­tion of a mi­ni­mum ta­xa­tion rule could be re­le­vant. This rule ap­plies to com­pa­nies and per­ma­nent es­ta­blish­ments sub­ject to cor­po­rate in­come tax that make a tax loss in a fis­cal year or whose in­come (ex­clu­ding ca­pi­tal gains) is less than 1 % of sa­les. The tax rate for the pur­pose of mi­ni­mum ta­xa­tion is 10 %. The tax base for mi­ni­mum ta­xa­tion is cal­cu­la­ted se­pa­ra­tely and amounts to 4 % of in­come from ope­ra­ti­ons, in­crea­sed by cer­tain ex­pen­ses from re­la­ted party tran­sac­tions and re­du­ced by cer­tain de­duc­tible ex­pen­ses. The cor­re­spon­ding tax can be de­duc­ted from the re­gu­lar cor­po­rate in­come tax of the th­ree fol­lo­wing years. There are some ex­cep­ti­ons to the mi­ni­mum ta­xa­tion, e.g. for start-ups (not ol­der than 3 years), for com­pa­nies in tem­porary eco­no­mic dif­fi­cul­ties and for com­pa­nies from spe­ci­fic in­dus­tries.

The Po­lish thin ca­pi­ta­liza­tion rule is also being tigh­te­ned up, which is li­kely to be re­le­vant in par­ti­cu­lar for Po­lish group com­pa­nies. In ad­di­tion, in­te­rest ex­pen­ses from lo­ans gran­ted by re­la­ted par­ties will not be de­duc­tible for tax pur­po­ses in the fu­ture if they can be di­rectly or in­di­rectly al­lo­ca­ted to so-cal­led equity tran­sac­tions (e.g. the ac­qui­si­tion of sha­res or contri­bu­ti­ons).

In ad­di­tion, va­rious tax in­cen­ti­ves and be­ne­fits are in­tro­du­ced. For ex­am­ple, un­der cer­tain con­di­ti­ons, in­ci­den­tal ac­qui­si­tion costs (such as no­tary fees, ta­xes, pu­blic char­ges, le­gal fees, etc.) are tax de­duc­tible when ac­qui­ring the ma­jo­rity of sha­res up to the amount of the ac­qui­ring com­pany's in­come and up to a ma­xi­mum of PLN 250,000. The ac­qui­rer and the tar­get com­pany must have been ope­ra­ting for at least 24 months and must not have al­re­ady been re­la­ted par­ties.

In­come from le­gally pro­tec­ted in­tel­lec­tual pro­perty (e.g. pa­tents, soft­ware) crea­ted, de­ve­lo­ped or im­pro­ved as part of the tax­payer's R&D ac­tivity is ta­xed at a pre­fe­ren­tial rate of 5 % ("IP Box").

When buil­ding pro­to­ty­pes or launching new pro­ducts on the mar­ket, up to 30 % of the ex­pen­ses are tax de­duc­tible, up to a ma­xi­mum of 10 % of the in­come.

Fur­ther tax be­ne­fits are also avail­able in con­nec­tion with ex­pen­ses for ro­bo­tiza­tion and re­se­arch and de­ve­lop­ment.

The Po­lish re­gu­la­ti­ons on trans­fer pri­cing do­cu­men­ta­tion have also been tigh­te­ned, at least in for­mal terms (sub­mis­sion dead­lines, elec­tro­nic trans­mis­sion, ab­oli­tion of the tur­no­ver th­res­hold for the mas­ter file).

You can find more in­for­ma­tion un­der the fol­lo­wing link: https://www.ad­vicero.eu/en/ad­vicero-ne­xia-tax-alert-po­lish-or­der/

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