The taxable period is the calendar year (between 1 January and 31 December). Companies are entitled to choose another (than calendar) fiscal year (e.g. between 1 April and 31 March).
Companies are, in general, required to file their tax returns electronically. The annual CIT return should be submitted to the tax office within three months following the end of the tax year.
Payment of tax
The same deadline as the CIT return applies to the settlement of the annual CIT liability. In financial terms, the final settlement is not significant since most of the annual liability is paid by CIT advances throughout the tax year.
The CIT advances should be paid for each month by the 20th day of the following month. Entities that started business activities (except for companies organised as a result of certain transformations) and entities whose gross sales revenue (including VAT) in the prior tax year did not exceed EUR 2 million are entitled to opt to make advance settlements on a quarterly basis (instead of a monthly basis).
Individual tax account numbers
As of 1 January 2020, each taxpayer and tax remitter should transfer all of their Polish tax liabilities to a given tax office’s bank account using a so-called 'individual tax account' identifying a given taxpayer or tax remitter.
The tax authorities do not intend to advise taxpayers or tax remitters on their individual tax accounts binding as of 2020. Instead, all taxpayers and tax remitters will need to obtain the relevant number on their own, either by visiting their tax office in person or generating it online on an official Ministry of Finance webpage after providing the tax identification number. Obtaining or generating an individual tax account will not be possible without the appropriate tax identification number.
Tax audit process
The tax authorities generally shall notify its intention to initiate a tax audit. The inspection shall be initiated not earlier than after seven days and not later than 30 days from the receipt of the notice.
The duration of all audits in one calendar year may not exceed the following:
- For micro entrepreneurs: 12 working days.
- For small entrepreneurs: 18 working days.
- For medium entrepreneurs: 24 working days.
- For large entrepreneurs: 48 working days.
The rules mentioned above do not apply to the inspection commenced by the customs and revenue office. This kind of tax inspection is initiated without issuing a notification and in practice there is a possibility to prolong the inspection without any specific time limits.
Cooperation agreement with the Head of the National Fiscal Administration
The entrepreneur being a party to the cooperation agreement will have the opportunity to discuss with the Head of the National Fiscal Administration important issues related to the tax settlements. Such arrangements may concern, among others:
- Interpretation of tax laws and the content of tax rulings.
- Transfer pricing rules.
- The amount of advance income tax.
- Non-applicability of the general anti-avoidance rule.
The cooperation agreement may provide the taxpayer with benefits such as reduction (by half) of the fees for an APA and for a security opinion, as well as reduction (or, in some cases, even the lack) of interest on tax arrears. The cooperation agreement may also protect an entrepreneur against additional tax liability and the tax audit. Moreover, the custom and fiscal control of a taxpayer who is a party to the cooperation agreement will be carried out only by the Head of the National Fiscal Administration.
Statute of limitations
Tax liability expires five years after the end of the calendar year in which the tax payment deadline passed. There are also situations when the statute of limitations can be suspended or interrupted (e.g. litigation).
Topics of focus for tax authorities
According to recent statements from the MoF, the focus of the tax audit authorities is on transactions between related parties (transfer pricing issues), VAT frauds, and tax restructuring. Moreover, traditionally, tax audits usually cover:
- Validity of the VAT refund.
- The application of the general tax avoidance clause
- Possibility to correct excise duty resulting from post-transaction rebate.
- Correctness of settlements concerning the use of a trademark.
In connection with the COVID-19 pandemic and anti-crisis shields, tax authorities have also started to verify the legitimacy of entrepreneurs using protective measures.
Individual binding rulings are issued at a taxpayer’s request in individual cases. A ruling should be provided in 3 months; these are subject to the payment of a fee (immaterial amounts). If no decision is taken within the deadline established, there is a tacit approval of the taxpayer's understanding of the tax matter.
General binding rulings are issued by the Ministry of Finance in order to ensure the uniform application of tax law by tax authorities.
As of 1 January 2022, the so-called Investment Agreement, an agreement concluded between an investor and a tax authority which concerns the tax consequences of a planned investment in Poland was introduced.
The Investment Agreement is a new solution that has not been present in the Polish tax system. The conclusion of an Investment Agreement is to protect the investor from the negative tax consequences more than individual tax rulings do. At the same time, it gives the investor an opportunity and an incentive to join the Cooperation Agreement after the investment is made.
An Investment Agreement takes the form of an agreement concluded between the Ministry of Finance and an investor, i.e. an entity that plans or has started an investment on the territory of Poland with a value of at least PLN 100 million (PLN 50 million from 2025). Investment Agreement is addressed primarily to foreign entities planning to start a new business in Poland. Nevertheless Polish residents are not excluded from benefiting from these regulations.
The regulations indicate two types of fees that investors will have to pay in order to enter into an agreement: an initial fee and a main fee. The initial fee, which is the payment for the application, is to amount to PLN 50,000 (from each investor filing in the application). The conclusion of an Investment Agreement is to be subject to a main fee of not less than PLN 100,000 and not more than PLN 500,000. The amount of the fee will depend on, among other things, the declared value of the investment and its complexity.
Investment Agreement is to be equivalent to the following administrative acts:
- Advance pricing agreement (unilateral only);
- GAAR ruling;
- Binding Excise Information;
- Binding Rate Information;
- Individual tax ruling.
The agreement may cover all or some of the above acts. It is valid for 5 years from the date of issue. It is possible to renegotiate its contents resulting in changes to the agreement, including extending its duration.
New specialisation of tax offices
Starting from 1 January 2021, there is a new jurisdiction of the specialised tax offices, including I Mazowiecki Tax Office, which is responsible for the largest taxpayers.
I Mazowiecki Tax Office in Warsaw is responsible for the following taxpayers:
- Legal entities or organisational entities without legal personality whose net income from the sale of goods, products, and services in the tax year exceed EUR 50 million (excluding civil law partnerships).
- Capital tax group and companies forming part of the group.
- Public companies with the headquarters in Poland.
The Ordinance also introduces 19 specialised tax offices, which are responsible for the following taxpayers:
- Legal entities or organisational entities without legal personality whose net income from the sale of goods, products, and services in the tax year amounts to EUR 3 million to EUR 50 million (excluding civil law partnerships).
- Foreign entrepreneurs whose net income from the sale of goods, products and services in the tax year amounts to at least EUR 3 million.
- Branch or representation of foreign entrepreneurs.
Additionally, II Mazowiecki Tax Office in Warsaw is the dedicated tax office for investment and pension funds and for foreign entrepreneurs (net income exceeding EUR 3 million) who have a fixed establishment in more than one territorial jurisdiction of the specialised tax offices.
Tax Office in Lublin is responsible for WHT proceedings.
General anti-abuse rule (GAAR)
According to amendments to the Tax Ordinance Act and certain other acts, legal transactions with the main purpose of obtaining a tax advantage contrary to the tax regulations shall not result in tax benefit. Tax consequences of such transactions will be assessed as if an alternative 'appropriate' transaction had taken place. Furthermore, if transactions carried out by a taxpayer do not have any real economic or business rationale other than tax avoidance, tax authorities may completely disregard them.
The GAAR will be applied to the tax benefits received after the amendments were introduced (i.e. 15 July 2016). This means that the sole fact that the transaction was carried out before the amendments entered into force may not exclude application of the regulations in case the taxpayer obtains a tax benefit after the GAAR is introduced.
As of 1 January 2019, there is a penalty payment in the form of an additional liability of 40% (or 10%) of the tax liability resulting from the application of the clause. Penalty payment also covers application of other anti-abuse clauses, transfer pricing settlements, and cases where the WHT payer issued an incorrect statement and did not make the required verification with reference to the WHT rate. The 10% rate may apply to income taxes where income constitutes the tax base.
The above penalty payment rate may be doubled in the case of tax benefits exceeding PLN 15 million, where the taxpayer has previously received a final decision on the basis of anti-abuse provisions, or in the absence of transfer pricing documentation. In certain circumstances, the above rates may also be reduced by half.
The applicability of the GAAR clause has been also extended to remitters. A number of detailed changes in the application of the GAAR clause has been introduced (e.g. issues of statute of limitation, correction of declarations in the course of GAAR related proceedings, clarification of the artificiality condition also in GAAR proceedings), including proceedings for issuing of a protective opinion.