Tax Blog

Withholding tax (WHT) in Poland has undergone significant changes in recent years. Since 1 January 2022, a new mechanism called “pay and refund” applies to certain cross-border payments. This system has major implications for foreign investors, expats, and multinational companies receiving dividends, interest, or royalties from Poland.

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.

The IP Box (Innovation Box) is a special tax regime introduced in Poland in 2019 under the Corporate Income Tax Act and the Personal Income Tax Act. It allows qualifying income from eligible intellectual property to be taxed at a preferential 5% rate instead of the standard rates (19% /9% CIT and 12%-32% PIT or 19% PIT). The aim is to encourage innovation, R&D, and the development of new technologies in Poland.

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.

The Council of Ministers has adopted further draft laws included in the deregulation package. Among them are two bills providing for changes in income taxes and inheritance and gift tax. They were referred for the first reading at the Polish Parliament on May 21, 2025. According to the drafts, the new income tax regulations are to take effect on January 1, 2026, while the changes in inheritance and gift tax are to take effect 14 days after the date of publication in the Journal of Laws of the Republic of Poland.

On 4 April 2025, the Polish Parliament passed a law reducing health insurance contributions for entrepreneurs. This is due to come into effect on 1 January 2026. However, it should be noted that further proceedings are required for the law to be enacted.

As of January 1, 2025, a new regulation on exemptions from the obligation to keep records of sales using cash registers is in effect. It is to be in effect for a period of 3 years, i.e. until the end of 2027. The new regulations maintain the PLN 20,000 threshold for entity exemption at the current level. On the other hand, changes are provided for in the catalog of subjective exemptions (annex to the regulation). Among the activities removed from the aforementioned catalog is the supply of goods and provision of services using automatic sales devices (so-called vending).

Introduced as of 1 January 2025, the SME special procedure allows small entrepreneurs established in the European Union to benefit from a subjective exemption from VAT in other EU Member States in whose territory they sell.