As of January 1, 2025, Poland has introduced a minimum income tax of 10% on specific tax bases. This new rule, part of the updated Corporate Income Tax Act, is designed to target entities that report little to no income despite significant turnover.
The goal? To ensure fair taxation and address situations where large companies consistently declare minimal profits or even losses.
Who does it apply to?
The minimum tax applies to: • CIT taxpayers (including tax capital groups)
• Foreign entities with a permanent establishment in Poland
You may fall under this tax if you: • Suffer a loss from a source of income (other than capital gains), or
• Have a profit margin (income-to-revenue ratio) of 2% or less from non-capital gains.
Important exemptions
Not everyone is subject to this tax. Key exemptions include: • Start-ups during their first three tax years
• Financial enterprises
• Companies with revenues at least 30% lower than the previous year
• Entities with simple ownership structures
• Companies in industries like international shipping, mineral mining, or medical services
• Small taxpayers (2025 limit: 9,218,000 PLN in revenue)
• Businesses undergoing bankruptcy, liquidation, or restructuring
How is the minimum tax calculated?
The tax base can be determined using two methods:
- Classic method:
- 1.5% of revenues from non-capital gains
- Excessive debt financing costs
- Certain service and intangible costs exceeding defined thresholds
- Simplified method:
- 3% of revenues from non-capital gains
In both cases, the tax rate is 10%.
When and how is it paid?
The first payments will be due in 2025, based on 2024 results. You’ll report the minimum tax in your annual CIT-8 return, and it can be offset against standard CIT within three years.
Why does this matter?
This is a significant change for businesses operating in Poland, particularly those with complex financial setups or low profitability. While the law aims to ensure fair contributions, it’s essential to understand the nuances and prepare for compliance.
Need help?
Navigating new tax regulations can be tricky. At BPiON, we’re here to guide you through the details, helping you adapt your business to meet these requirements seamlessly.
