The CIT is the only tax levied on corporate income. The standard CIT rate is 19%.
As of 1 January 2019, a lower 9% CIT rate for 'small taxpayers' has been introduced. Companies that are subject to CIT with revenues of up to 1.2 million euros (EUR) in the given tax year and companies starting business activity from 2019 are able, under some conditions, to use the 9% CIT rate. Note that the gross sales revenue threshold, which entitles taxpayers to acquire the status of a 'small taxpayer', is increased from EUR 1.2 million to EUR 2 million from 1 January 2020.
Polish tax residents are subject to tax on their worldwide income. Non-residents are taxed only on their Polish-sourced income. The tax authorities' right to tax a non-resident is further limited if the non-resident's country of residence concluded a DTT with Poland. In this case, the Polish tax authorities are, as a rule, entitled to tax only the portion of the non-resident's income that may be attributed to a PE located in Poland if such income has arisen in Poland for the foreign tax resident. Exceptions relate to specific types of income, such as royalties, interest, dividends, and capital gains, which may be in Poland even if no PE exists.
As of 1 January 2019, exit tax (i.e. taxation of unrealised capital gains in the case of transfer of assets, change of tax residence, or taxpayer's PE outside the territory of Poland) has been introduced. The exit tax rate has been established at 19%. The tax base is the surplus of the market value of assets, with respect to which Poland would lose taxing rights, over their tax value. Under certain conditions, taxpayers may be able to apply for payment in instalments for a period not exceeding five years.
There is a separation of income/loss sourced from capital transactions from other income/loss sources. Taxpayers have to recognise revenues and costs related to each ‘basket’ separately. There is no possibility to set-off income derived from one ‘basket’ with loss borne in the other ‘basket’. Income in both baskets is taxed at 19% CIT. Apart from share/capital transactions, the capital basket includes royalties, license fees, and similar rights.
Polish companies with foreign participation may be set up as either limited liability companies or joint-stock companies. There is no limitation on the percentage of foreign participation. Both types are subject to the general CIT rules, including the standard 19% tax rate (and other rates, depending on the type of revenue sourced in Poland). The same rate applies to branches of foreign companies (see the Branch income section for more information).
Certain entities are explicitly excluded from the group of taxpayers under the CIT law (e.g. Treasury, National Bank of Poland). Polish and European Union (EU)/European Economic Area (EEA) based investment funds are also exempted on the grounds of such provision.
There is a ‘minimum income tax level’ for taxpayers holding substantial real estate, which has initial value over PLN 10 million. As of 1 January 2019, the minimum threshold of PLN 10 million is applicable to a whole portfolio of buildings possessed by a given taxpayer. ‘Minimum tax’ is payable monthly at 0.035% of excess of the initial value of the building over PLN 10 million (0.42% annually). Consequently, tax will be due regardless of the level of actual income derived by the taxpayer. This minimum tax can be set-off against CIT if CIT is higher.
Local income taxes
There are no provincial or local income taxes in Poland.