Below is a summary of the key proposed changes.
What will change?
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**Payments from one’s own company to a sole trader subject to a higher flat-rate tax.**According to the Ministry of Finance, the use by flat-rate taxpayers of an optimisation mechanism involving the provision of services to a related entity, thereby reducing, for example, the dividend payable, which is taxed at a rate of 19% under PIT – it is proposed that such services be taxed at a rate of 17% of revenue.
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**Buying out a lease into private assets, donating to immediate family and selling after 6 months without PIT may soon no longer work.**The Ministry of Finance proposes to tax income from the sale of movable property received by the immediate family of an entrepreneur who has purchased that property for their private assets after the end of an operating lease, and which they previously used in their business activities, provided the family benefits from the exemption from inheritance and gift tax and the sale takes place within 3 years of receipt.
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**Housing allowance – clarification of the concept of ‘own housing purposes’ within the framework of the housing allowance.**Clarification of the concept by specifying that it is intended to meet the taxpayer’s own housing needs. These needs will be met through the acquisition of residential property or rights, or land for the construction of the taxpayer’s own home, provided the taxpayer does not own any other property or residential premises. Currently, owning several flats or houses does not prevent a taxpayer from claiming the relief.
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An end to tax optimisation based on tax-transparent general partnerships. Profits of partners arising from the liquidation of a partnership formed through a conversion – where liquidation occurs earlier than after 3 years – are to be taxed. Objective: to close aggressive ‘conversion → liquidation’ sequences.
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Employment requirement for applying the IP Box (at least 3 unrelated persons). The preferential 5% IP Box rate is conditional upon the employment of at least 3 unrelated employees.
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PIT taxation of benefits in kind (datio in solutum). Benefits in kind provided in lieu of cash are currently subject to PIT only in business activities; privately – not. The Ministry of Finance proposes that, in the case of the sale of goods/property/rights for consideration to settle a debt (e.g. a loan), the revenue should be the value of the settled liability.
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Solidarity levy – offsetting losses and the IP Box The base for the levy may be reduced by losses from the same source; at the same time**, income from the IP Box** is to contribute to its base.
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Financial instruments in loyalty schemes. Income from the realisation of selected instruments (e.g. warrants) is to be attributed to the actual source of the benefits (often – the employment relationship), rather than to cash assets.
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Changes to Estonian corporate tax:
- Definitions of a taxpayer commencing business (CIT). Introduction of a definition excluding from this category entities continuing the business of another taxpayer.
- Presumption regarding the origin of profit distributions under Estonian CIT. A presumption that any payment/distribution made after the end of the Estonian CIT tax period derives from profit generated during that tax period.
- Definition of non-business-related expenses. Introduction of a definition covering expenses not incurred for the purpose of generating, retaining or securing revenue, as well as statutory penalty charges.
- Clarification of the concept of ‘hidden profits’ in the corporate income lump sum scheme, in the context of transactions with related parties. Removal of the condition regarding a right to share in profits and expansion of the list (including fees arising from lease or tenancy agreements or other similar contracts).
- Validity of switching to lump-sum taxation in the event of formal deficiencies in the report. Recognition of the change in taxation as valid despite the absence of a signature or the report being signed after the deadline, provided other conditions are met.
What stage are the works at?
This is a government bill on the Council of Ministers’ Work List (UD116), with adoption planned for Q3 2025. The next steps are adoption by the government, publication in the Official Journal of the Republic of Poland (RCL)/ISAP, deliberations in the Sejm and Senate, and promulgation. The content of the planned amendments is a preliminary outline and may still change during the legislative process.
Link to the draft amendments: https://www.gov.pl/web/premier/projekt-ustawy-o-zmianie-ustawy-o-podatku-dochodowym-od-osob-fizycznych-ustawy-o-podatku-dochodowym-od-osob-prawnych-oraz-niektorych-innych-ustaw6
Frequently asked questions
Will distributions from a company to own business activity taxed with a lump sum now be taxed at a different rate?
The Ministry of Finance proposes that services provided to a related entity be taxed at a rate of 17% of revenue. This aims to limit optimization mechanisms that previously allowed for reducing the due dividend taxed at a rate of 19%.
Will I still be able to sell a car after purchasing it from leasing and gifting it to family without paying tax?
New regulations may tax revenue from the sale of such movable property if you dispose of it before three years have elapsed from receiving the gift. This applies to situations where an entrepreneur purchased a vehicle into private assets and then transferred it to immediate family benefiting from exemption from inheritance and gift tax.
Does owning several apartments still allow for using the housing relief?
According to the proposed changes, this relief will only be available when the taxpayer does not own other real estate or residential premises. The concept of own housing purposes has been clarified, indicating that the acquisition of real estate should serve to satisfy the needs of a taxpayer who no longer has another apartment.
What conditions must be met to benefit from the preferential IP Box rate?
The Ministry of Finance proposes making the use of the preferential 5% rate conditional on employing at least three unrelated employees. This is a new condition that must be met by a taxpayer wanting to benefit from this form of taxation.
Will profit distributions under Estonian CIT now be presumed to originate from profit?
Yes, the ministry proposes introducing a presumption that every distribution or payout after ending Estonian CIT taxation originates from profit generated during the period of taxation under this form. This aims to provide greater transparency and control over financial flows in this formula.
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I specialize in Polish tax law, particularly income taxes, as well as international tax law. My experience includes, among others. providing ongoing tax advisory services, preparing legal and tax opinions, drafting requests for individual interpretations, conducting tax reviews. I gained professional experience in Warsaw law firms.
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