Safe tax optimization

Moving to Poland for work or business can be a big step, but it comes with a powerful tax incentive. Under the Polish Return Tax Relief (ulga na powrót), individuals who become Polish tax residents after living abroad can enjoy up to PLN 85,528 of tax-free income each year for four consecutive years.That’s over PLN 342,000 of completely tax-free income. This benefit applies both to both employees and entrepreneurs, making it one of the most attractive relocation incentives in Europe.MartiniTax helps both expats and returning Polish citizens to qualify for the relief with all the steps necessary.

In its new ruling, the CJEU addressed, in particular, the issue of determining the VAT tax base when a taxpayer incorrectly considered its supply to be exempt instead of applying the correct VAT rate. The case in question concerned a Hungarian taxpayer selling goods to purchasers who were not residents of the European Union. The sale in question was eligible for VAT exemption if certain conditions were met. In particular, the seller had to complete a tax refund application form at the request of the foreign traveller. After exporting the goods outside the European Union, the taxpayer refunded the VAT amount indicated on the invoice to the buyers.

From January 1, 2026, changes to the rules for settling costs related to passenger cars in business activities will come into force. The new regulations make depreciation and leasing cost limits dependent on the vehicle’s CO₂ emissions. The new regulations will apply to all vehicles entered in the fixed asset register after December 31, 2025. For cars purchased and entered in the register before that date, the current depreciation rules will remain in force. However, the legislator has not provided for transitional provisions with regard to operating leases and long-term rentals. In practice, this means that from January 2026, there is a risk that lease payments for cars with CO₂ emissions exceeding 50 g/km will be settled according to the new, lower limit of PLN 100,000, even if the agreement was concluded earlier.  

The Council for Counteracting Tax Avoidance has published its first opinion directly concerning practices related to the use of family foundations for asset transfers. This event is significant not only because of the precedent set by the new body issuing an opinion, but also because of the content of the conclusions presented therein. The resolution was drafted at the request of the Head of the National Tax Administration, who pointed to serious doubts regarding the actions taken by the founder and the management board of a family foundation in relation to the rapid transfer of shares, their sale, and the payment of the proceeds to the founder in the form of a benefit. The Council’s position is of particular interest to owners of family foundations and their advisors, as it sets a practical direction for interpreting the anti-tax avoidance clause in the case of the sale of property by family foundations.

On September 28, 2023. The Ministry of Finance published draft WHT clarifications (hereinafter: “Draft Clarifications”). The Draft Explanation focuses on the issue of the beneficial owner of receivables (“beneficial owner”). This is the second draft of the WHT clarifications, as the 2019 version of the previous document, due to numerous postponements of its entry into force and amendments to the said regulations, was not published as a final document.

The prototype tax credit from January 1, 2022 is available to entities engaged in research and development activities. The purpose of this relief is to support entrepreneurs to carry out activities that create new and improve existing products, processes and services. It will be available to those taxpayers who incur expenses at the stage of testing an invention, prior to mass production and marketing. A company that decides to prepare a prototype can include the expenses incurred for its creation in deductible costs, and will also gain the ability to deduct additional expenses from the tax base.

Managing innovation and research is not only a scientific mission, but also an opportunity for significant tax benefits. In Poland, where tax law is complicated, some companies may not realize that they can take advantage of tax breaks for Research and Development (R&D). Even fewer companies are aware of the special benefits available to units with Research and Development Center (CBR) status. In this post, we cover the topic of tax preferences for R&D, and specifically the benefits for entities with CBR status.

In the light of the dynamically changing tax regulatory landscape, especially for those engaged in R&D activities, it is becoming increasingly important to understand and effectively utilize the available tax credits. In this context, the R&D Tax Credit and the IP Box Tax Credit, both aimed at taxpayers engaged in R&D activities, seem extremely attractive, especially in the context of the recent changes introduced by the “Polish Deal.” However, is it possible to use both of these reliefs at the same time? What benefits might this bring to taxpayers?