Poland

Taxable period

The taxable period is the calendar year (between 1 January and 31 December). Companies are entitled to choose other (than calendar) fiscal year for the purpose of CIT (e.g. between 1 April and 31 March).

Tax returns

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).

From 7 September 2023, the interest rate for late payment is 15% per annum (until then - 16.5%).

Individual tax account numbers

As of 1 January 2020, each PIT, CIT, and VAT payer or remitter should transfer all of their Polish tax liabilities to a given tax office’s bank account using an individual tax account (‘tax micro-account’) identifying a given taxpayer or tax remitter. The tax micro-account may be checked using the generator or at any tax office.

Generating an individual tax account is not possible without the appropriate tax identification number. Taxpayers waiting for a decision on granting the tax identification number (NIP) pay the amount due to the tax micro-account of a competent tax office.

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.

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

In recent years we observe that the most inspections concern VAT, regarding frauds and validity of the VAT refund. This is undoubtedly related to the introduction of the Standard Audit File submitted by all VAT payers. The focus of the tax audit authorities is also directed on transactions between related parties (transfer pricing issues), withholding taxes, as well as new discounts and preferences in CIT.

According to data provided by the Ministry of Finance, in the first quarter of 2023, the following number of tax audits carried out by tax offices in the most popular audit areas was recorded - comparing to data for the year 2022 (in brackets):

• VAT - 2,033 (10,148),
• CIT - 328 (1,119),
• PIT - 746 (7,185)

Binding rulings and APAs

General binding rulings are issued by the Ministry of Finance (MoF) in order to ensure the uniform application of tax law by tax authorities.

Individual binding rulings are issued at a taxpayer’s request in individual cases. A ruling should be provided in three months and is subject to the payment of a fee (immaterial amount). If no decision is taken within the deadline established, there is a tacit approval of the taxpayer's understanding of the tax matter.

The individual tax ruling provides protection only to the entity that requested the ruling. However, if the same factual state or future event applies to two or more taxpayers (e.g. parties to the same transaction), they may submit a joint application for an individual tax ruling. 

The ruling is not binding for the tax authorities (e.g. tax offices and fiscal control offices) from the formal point of view. Nevertheless, according to the law, compliance with the interpretation should not lead to any harm to the taxpayer (i.e. if the taxpayer follows the ruling, they should not be required to pay any penalty interest or be subject to fiscal-penal responsibility even if the tax authorities do not agree with the ruling in their proceedings). 

In case of rulings covering future events (e.g. rulings obtained prior to closing of a given transaction), the taxpayer should also be protected not just against interest and penal fiscal liability, but also against the base tax liability.

Entities performing related-party transactions may also apply to the Head of NFA for APAs available under certain conditions (for more details, see comments on the ‘Transfer pricing’ in Group taxation section).

Cooperation agreement

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.

PwC actively participated in the expert support of the first taxpayer to conclude the cooperation agreement with the Head of the NFA in March 2022. By the end of 2023, the list of taxpayers who joined the program amounted to 11 entities.

Investment Agreement

As of 1 January 2022, the so-called 'Investment Agreement', an agreement concluded between an investor and the tax authority that concerns the tax consequences of a planned investment in Poland, was introduced.

The Investment Agreement is a new solution aimed at  protecting the investor from the negative tax consequences in a wider scope 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 if Finance and the 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). An 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 in a range of PLN 100,000 - PLN 500,000. The amount of the fee will depend on, among other things, the declared value of the investment and its complexity.

An 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 five years from the date of issue. It is possible to renegotiate its contents, resulting in changes to the agreement, including extending its duration.

Based on data published by the Ministry of Finance, no investment agreement has been concluded by the end of 2023.

Obligation to prepare and publish information on the execution of tax strategy

On 1 January 2021, an obligation to prepare and publish information on the execution of tax strategy entered into force.

The obligation will apply to taxpayers whose revenues exceeded EUR 50 million in a tax year and tax capital groups.

Taxpayers shall prepare and disclose information on, inter alia,:

• the approach to processes and procedures on managing obligations arising from tax regulations and ensuring their proper execution
• the number of submitted reports on tax schemes (under mandatory disclosure rules [MDR]), separately for each tax, and
• transactions with related entities, the value of which exceeds 5% of the total assets on the balance sheet (based on the Statutory Financial Statements).

The taxpayer publishes information about the implemented tax strategy in Polish on its website and electronically informs the head of the competent tax office about the address of the website on which it is published - by the end of the 12th month following the end of the tax year to which the report relates.

Reporting obligations of real estate companies

If a given entity is classified as a ’real estate company‘ in line with the specific definition provided by Polish CIT Law, this may translate into the following obligations:

• New mechanism of capital gains tax collection upon the sale of shares in such company by non-residents.
• Annual obligation to disclose the group structure to the tax authorities. 
• Automatic publication of certain basic tax data by the authorities (on an annual basis).

However, please note that the specific definition of a real estate company under the Polish CIT Law should not be confused with the concept of so-called ’land-rich company‘ (often used interchangeably with ’property-rich company‘ or ’real estate-rich company‘), which, under the domestic legislation, would be any company (and other entities) whose assets comprise, directly or indirectly, of real estate located in Poland of at least 50% (also DTTs provide for a similar concept, but the definitions may differ to some extent).

A real estate company should be understood as an entity in which:

• at least 50% of the balance sheet total value of assets consisted, directly or indirectly, of the carrying amount of real estate located in Poland or rights to such real estate (or, in case of entities commencing their activity, at least 50% of the market value of assets consisted, directly or indirectly, of the market value of real estate located in Poland or rights to such real estate),
• the respective fair market/book value of the real estate exceed PLN 10 million, and
• in the previous tax year, the company obtained at least 60% of taxable revenues from (sub)rental, (sub)lease, agreements of a similar nature, or from ownership rights relating to real estate/other real estate companies (unless it is an entity commencing its activity).

New specialisation of tax offices

Starting from 1 January 2021, there is a new jurisdiction of the specialised tax offices, including the 1st Mazowiecki Tax Office, which is responsible for the largest taxpayers.

1st 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 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)

In line with the GAAR, 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 is applicable 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 have been introduced, including proceedings for issuing of a protective opinion by the Head of National Fiscal Administration (NFA). The protective opinion is issued if the circumstances presented in the application indicate that the tax benefit described in the motion is not subject to the GAAR. In case of the motions for issuance of the protective opinions, the Head of NFA analyses the case more deeply than in case of individual tax rulings (e.g. tax ruling fully relies on the descriptions of the backgrounds presented by the taxpayers).

The Polish Tax Law also contains: (i) other specific anti-abuse/anti-avoidance provisions dedicated to certain transactions/events (e.g. anti-abuse provisions in the CIT Law covering certain types of transactions/distributions, such as mergers, dividend payments, interest payments, or share-for-share exchanges); (ii) ’exit tax‘; (iii) anti-abuse provisions included in the VAT Law; and (iv) MDR.

Central Electronic System of Payment information

As of 1 January 2024,  the payment service providers are obliged to keep electronic records of payment data for cross-border payments and to exchange these records with a newly established central EU-database, i.e. Central Electronic System of Payment information (the so-called CESOP). The purpose of the new reporting obligation is to combat VAT fraud.

Under the new reporting requirements, domestic banks, foreign bank branches, credit institutions, payment institutions, and credit unions must maintain, store, and report on cross-border payments to the Head of National Revenue Administration, when the payment service provider makes more than 25 such payments to the same payee per quarter.

Payment service providers must keep electronic records of cross-border payments for a period of three calendar years from the tax year the payment was made.

The first CESOP report should be sent to the competent authorities by 30 April 2024. The Ministry of Finance will transfer the collected data to the central register by 10 May 2024.

Opinions on the cross-border reorganisations

On 15 September 2023, an amendment to the Commercial Companies Code entered into force, introducing important regulations regarding domestic and cross-border reorganisations and the effects of these reorganizations under tax law.

In the field of cross-border transformation, merger and division, a completely new obligation has been introduced to obtain a prior opinion from the Head of the National Fiscal Administration on whether: 

• the reorganisation carried out does not constitute tax avoidance within the meaning of the general anti-avoidance clause (GAAR) or abuse of law, and 
• the company's public financial liabilities are satisfied or secured.

An application for an opinion should be submitted as part of an application to the registry court. As a rule, the Head of the NFA should issue an opinion within one month from the date of submitting the application, with the possibility of extending the deadline by a maximum of 3 months. Issuance of the opinion may be refused, among others, in the event of a justified assumption that the transaction is of an abusive nature or the public receivables will not be settled/secured. A negative decision may be appealed to an administrative court