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).
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 1.2 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.
- Possibility to correct excise duty resulting from post-transaction rebate.
- Correctness of settlements concerning the use of a trademark.
New specialisation of tax offices
Starting from January, 1 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 50M (excluding civil law partnership),
- capital tax group and companies forming part of the group,
- public companies with the headquarter 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 EUR 3-50M (excluding civil law partnership),
- foreign entrepreneurs whose net income from the sale of goods, products and services in the tax year amounts at least EUR 3M,
- branch or representation of foreign entrepreneurs.
Additionally, II Mazowiecki Tax Office in Warsaw is the dedicated tax office for investment and pension funds and also for foreign entrepreneurs (net income exceed EUR 3M) who have a fixed establishment in more than one territorial jurisdiction of the specialized tax offices.
Tax Office in Lublin is responsible for withholding tax 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.