CIT (Corporate Income Tax) is an income tax for legal entities and sole proprietorships (działalność gospodarcza), if the business entity is subject to corporate income taxation.
Działalność gospodarcza – business activity
- CIT (Corporate Income Tax) – the equivalent of the more commonly known PIT (Personal Income Tax), but for limited liability companies, joint-stock companies, and other organizations listed below.
- What are the CIT tax rates in Poland?
- CIT Tax Rates in Poland:
- Who must pay CIT?
- Income exempt from CIT in Poland includes:
- List of organizations exempt from CIT taxation
- Tax Changes in 2021:
- What are the current CIT rates in 2021?
- Most common CIT tax declarations in Poland:
- Other types and subtypes of CIT declarations
What are the CIT tax rates in Poland?
19% – the standard tax rate applied:
- to dividends and profit shares (applicable to businesses with a branch or management seat in Poland);
- to foreign companies controlled by legal entities registered and operating in Poland.
15% – previously applied to new businesses in their first tax year.
Currently reduced to 9% for small taxpayers.
CIT Tax Rates in Poland:
Legal entities without a branch or registered office in Poland but receiving income from Poland may be subject to other rates – 10% or 20%.
Who must pay CIT?
According to Polish law, Corporate Income Tax must be paid by:
- legal entities;
- organizational units without legal personality (except for partnerships without legal personality);
- companies without legal status but having a management board or business location abroad.
Income exempt from CIT in Poland includes:
- income from the sale of real estate that is part of a farm,
- income of church legal entities,
- income from lotteries and bingo games,
- income of housing cooperatives,
- income related to the maintenance of schools,
- subsidies received from the state budget,
- interest on bonds issued by the State Treasury and offered on foreign markets,
- income of national investment funds,
- income from the activities of political parties.
List of organizations exempt from CIT taxation
Tax Changes in 2021:
After the end of the fiscal year, the entities listed above must submit the appropriate CIT tax form to the tax office within the first three months (by March 31). However, in 2021, the deadline was extended to June 30.
CIT in Poland is paid by both large enterprises and smaller entrepreneurs across various industries. CIT is regulated by the Corporate Income Tax Act of February 15, 1992, which has been amended multiple times. In Polish, it is referred to as:
“Ustawa od dnia 15 lutego 1992 roku o podatku dochodowym od osób prawnych.”
What are the current CIT rates in 2021?
- The basic CIT rate is 19%.
- A reduced rate of 9% applies to small taxpayers and newly established companies in their first year of operation.
At the beginning of 2021, the revenue threshold for applying the 9% CIT rate increased from €1.2 million to €2 million.
Important: To qualify for the reduced tax rate, a second condition must also be met – the revenue in the previous year (e.g., 2020) must not exceed €2 million, calculated using the average euro exchange rate on the first working day of October of the previous tax year.
On October 1, 2020, the rate was 4.5153 PLN per euro.
Note: The current year’s limit applies to income excluding capital gains, while the previous year’s threshold includes gross sales revenue (with VAT).
You can get personal tax consultation here.
Most common CIT tax declarations in Poland:
- CIT-5 – on the distribution of dividend income or other profit shares in a legal entity.
- CIT-6AR – on the amount of income tax on income from participation in the profits of legal entities.
- CIT-6R – on the amount of flat-rate corporate income tax withheld from income received by a taxpayer with a registered office or management board in Poland.
- CIT-7 – on the tax withheld on dividends and other income from profit-sharing in legal entities.
- CIT-8 – the annual corporate income tax return.
Other types and subtypes of CIT declarations
The official registration time for a company using the S24 system is seven working days. In reality, if all documents are in order and each management board member has a PESEL number, the process can take 1 to 4 days.
Some companies that entrusted us with this process received their registered spółka (company) in just 24 hours. These figures are based on our direct experience and confirmed by many client companies.
