Agnieszka Gliwińska

Tax adviser (Poland)
Senior Associate
Phone: +48 71 606 04 04

The Act of 5 September 2016 amending the Personal Income Tax Act and the Corporate Income Tax Act (the "Act") will come into force on 1 January 2017.

The Act reformulates Article 19(1) of the Corporate Income Tax Act of 15 February 1992 (consolidated text in Journal of Laws of 27 June 2014, as amended, the "CIT Act") by introducing a preferential corporate income tax rate.

In addition to the standard rate of 19%, there will now be a reduced corporate income tax rate of 15%. This preferential tax rate will be available to small taxpayers meaning entities whose sales revenues (including the VAT amount) did not exceed in the preceding tax year the PLN equivalent of EUR 1,200,000. 

Also new taxpayers who have just opened for business will be able to enjoy the reduced tax rate, already in the first year of operation.

The new CIT Act restricts the rate of 15% with respect to entities that are newly-established entities as a result of restructuring operations mentioned in the regulation. These include transformations (except transformation of a CIT-paying entity into another CIT-paying entity), mergers or demergers, as well as certain statutorily-defined in-kind contributions to a company. The limitation applies for the first two years of a taxpayer's operation. Such taxpayers will be able to enjoy the preferential CIT rate from the third year of business, provided that they still classify as small taxpayers then.

The reduced CIT rate will not be available to tax-consolidated groups.

To protect your current or planned transactions we recommend checking them in terms of the upcoming changes.

The Act does not rule out foreign enterprises which are subject to the limited tax obligation in Poland and earn revenues through e.g. permanent establishments here. Therefore, we may assume that they will also be able to enjoy the rate of 15%. However, it is important to know whether in classifying an enterprise as a small taxpayer we need to take into account the overall revenues (including the revenues earned abroad) or only the revenues that may be attributed to a Polish permanent establishment.

As the regulations in this respect are not clear, we recommend applying for an advance tax ruling. Advance tax rulings protect individual taxpayers where the interpretation of laws is unclear.

We are happy to help and provide you with tax advice on CIT, PIT and VAT in Poland issues. Our tax advisers working in Rödl & Partner offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw will also answer other tax-related questions that you may have.