The CIT rates are:

• 19% tax base,
• 9% the tax base on income (gains) other than capital gains for small taxpayers and start-ups.

The reduced rate of 9% can be used:

• small taxpayers, whose gross sales revenue (including the amount of VAT) did not exceed EUR 2 million, in the previous tax year, the amount is converted at the average exchange rate of the National Bank of Poland (NBP) on the first working day of October of the previous tax year and rounded up to 1,000 PLN,
• whose income other than from capital gains achieved in the tax year did not exceed the net amount of EUR 2 million, this amount is converted at the average exchange rate of the National Bank of Poland (NBP) as at the first working day of the given tax year and rounded up to 1,000 PLN.

If a company is formed through restructuring, e.g. the conversion of an individual's business into a limited liability company, demerger of companies or other, it cannot apply the 9% rate.

In a company, income is taxed. In addition, two types of income are distinguished in companies that are CIT taxpayers:

• income earned from capital gains
• income earned from other profits.

A separate form of taxation, which is possible as of 1 January 2021, is a lump sum on the income of capital companies. i.e. the so-called Estonian CIT. In this case, the object of taxation (income) is the net profit, which will be allocated by the company for certain purposes.

Companies can deduct from their income, among other things:

• donations for, inter alia, public purposes to public benefit organisations, associations of local authorities or for religious purposes within a limit of up to 10% of income
• loans written off in banks in connection with restructuring (20% of such loans)
• donations for religious purposes
• donations for vocational training purposes made to public vocational training schools
• losses for a specific group of start-up companies
• relief for research and development (certain eligible costs)
• relief for innovative employees
• prototype relief
• relief for robotisation
• pro-growth relief
• consolidation relief
• relief for initial public offerings (IPOs)
• relief for support of sport, culture and education
• relief on payment terminals.

The preparation of the financial statements is the responsibility of the managers of the entity, i.e.:

• In the case of limited liability company, joint-stock company and simplified joint-stock company - the members of the management board
• In the case of civil partnership, general partnership and limited liability partnership - the partners who conduct the affairs of the company
• In the case of limited partnership and limited joint-stock partnership - general partners in charge of the company's affairs
• In companies undergoing liquidation or insolvency proceeding - the liquidator or administrator in insolvency proceedings
• In the case of other entities - the members of the management bodies.

You prepare the financial statements in Polish and in Polish currency. It shall consist of:

• Balance sheet
• Profit and loss account
• Notes to the Financial Statements
• Cash flow statement (prepared in specific cases)
• Statement of changes in equity (prepared in specific cases)

The financial statements must be accompanied by:

• a resolution approving the financial statements
• a report on the activities of the management board (to be drawn up in certain cases)
• a resolution distributing the profit or covering the loss
• the auditor's opinion/report (if the financial statements have been audited).

Companies which are registered with the National Court Register have 3 months to prepare their financial statements from the balance sheet date. If the financial year coincides with the calendar year, the deadline for preparing the accounts is 31 March.

The statements are then approved by the relevant bodies in the company, e.g.: the general meeting of shareholders, all shareholders, or the sole proprietor.

The annual financial statements should be approved no later than six months after the balance sheet date, i.e. by 30 June if the financial year coincides with the calendar year.

The financial statements in electronic form shall be signed by:

• the head of the entity and
• the person entrusted with keeping the accounts (e.g. the chief accountant).

The financial statements are reported to the KRS and sent in the e-KRS system, on behalf of the entity, by the head of the entity within 15 days of the approval of the annual financial statements.

The obligation to report information to the Register will apply to commercial law companies, i.e.:

• limited liability companies
• joint stock companies, not applicable to public companies
• limited partnerships
• limited joint-stock partnerships
• general partnerships
• simplified joint-stock companies

These are in fact all companies that are registered with the KRS. This obligation does not apply to branches of foreign companies.

The beneficial owner is always the natural person or several natural persons who directly or indirectly control the company in question. Importantly, the beneficial owners are those persons who have real power to influence the company's actions.

In the case of companies, the beneficial owner is:

• a natural person who is a shareholder of the company and holds more than 25% of the shares or stocks of the company concerned
• if the shareholder of the company is another commercial company, a natural person who holds more than 25% of the shares of the company which is a shareholder
• an individual who holds more than 25% of the total number of votes, including on the basis of agreements with other entitled persons as to the number of votes, e.g. as a pledgee or usufructuary of shares
• an individual exercising effective control by virtue of holding powers in the parent company
• if the shareholders of a company are, for example, 5 natural persons who each hold 20% of the shares, the beneficial owner is the natural person who holds the highest management position

The details of the Company to which the entry relates should be reported, namely:

• name
• form of organisation
• sregistered office
• KRS numbe
• NIP number

And also the data of the real beneficiaries, namely:

• first name and surname
• nationality
• country of residence
• PESEL number or date of birth - in the case of persons who do not have a PESEL number
• information on the size and nature of the shareholding or entitlement

The application to the Central Register of Beneficial Owners must be made by a person authorised in accordance with the KRS to represent the Company (if the representation is more than one, the application to the CRBR must be signed in the same way) electronically and signed with a qualified signature or a signature confirmed with an ePUAP trusted profile. The notification cannot be made by proxy.

The person who makes the notification and updates the data in the CRBR is liable for damages caused by the notification of false or incomplete data, as well as for failure to meet the notification deadline. Companies that fail to meet their obligations by the deadline are subject to a penalty of up to 1,000,00 PLN.

New companies must make a notification no later than 7 days from the date the company is entered in the KRS.

Any changes to the details of the beneficial owners should be made within 7 days

The main VAT rates applicable to local supplies in Poland are as follows:

• 23% - standard VAT rate
• 8% - reduced VAT rate - applies to the supply of certain foodstuffs, medical products, restaurant and hotel services and supplies covered by the social housing policy
• 5% - reduced VAT rate - used for the supply of certain foodstuffs (e.g. bread, dairy products, meat), certain types of printed books
• 0% - zero-rated VAT - is applicable, inter alia, to the supply of certain ships and aircraft, air and maritime transport services, international transport services, services relating to the import and export of goods

VAT taxpayers can be divided into:

• Active VAT taxpayers - paying VAT, keeping records of VAT sales and purchases, obligatorily issuing invoices,
• VAT-exempt taxpayers - using the subjective exemption (due to the low sales limit of up to 200,000 PLN) or the subjective exemption (performing only sales exempt from VAT pursuant to Article 43(1) of the VAT Act), keeping simplified records, issuing invoices with the ZW rate at the request of purchasers

Not all taxpayers can benefit from the VAT exemption, there are a number of activities that cannot be exempt from VAT even if your sales do not exceed 200,000 PLN, such services are for example:

• Advisory services
• Legal services
• Sale of parts for motor vehicles and motorbikes
• Selling of cosmetic products on-line
• Selling of computers, electronic goods, electrical goods on-line

Businesses registered for VAT can distinguish between two types of VAT:

• Output tax - VAT on sales that the entrepreneur must pay to the tax office
• Input tax - VAT on purchases that the entrepreneur can deduct from output tax payable to the tax office

Taxpayers may reduce the amount of output tax by the amount of input tax on the purchase of goods and services, provided that the purchases are related to sales subject to VAT.

There is an unconditional exclusion of VAT deduction on, inter alia, restaurant and accommodation services.

Restrictions on input tax deduction apply to expenditure on the purchase (including leasing) and operation of passenger cars, as well as fuel - in principle, 50% of input tax can be deducted. We can deduct 100% of VAT, but we must prove that the car is used exclusively for business purposes and report this fact to the tax office.

The excess of input tax over output tax can be carried forward to subsequent years or refunded. As a rule, reimbursement is made within 60 days of the submission of the VAT return.

If there are no taxable sales, the taxpayer may apply for a refund within 180 days of the submission of the VAT return.

The tax refund is paid to the bank account indicated by the company.

Supply of goods

VAT taxpayers selling goods to purchasers in EU Member States may apply the 0% VAT rate and treat the transaction as an intra-community supply of goods. The condition for applying the zero rate is to collect documents proving that the goods have been dispatched (either by the seller or by the buyer) to a buyer in another EU Member State.

The 0% VAT rate also applies to the export of goods, which takes place when goods are dispatched from Poland outside the EU. The shipment may be made by the seller (direct export) or by the buyer (indirect export). In order to apply the 0% VAT rate, it is necessary to obtain customs documents confirming that the goods have left the territory of the EU.

Provision of services

Polish regulations on the provision of services are in line with similar regulations applied in other EU Member States.

In the case of services provided between taxable persons (B2B) who are established in other countries, the primary place of taxation is the country in which the entity purchasing the service is established (of course, there are many exceptions to this rule). In this case, we must inform the buyer that this is a so-called reverse charge transaction. We write this information on the invoice and apply the tax rate "NP." (this means that this transaction is not subject to VAT in Poland).

The situation is different for services provided by a taxable person to a non-taxable person (B2C) - in this case, the place of business of the service provider is crucial.

Taxpayers intending to carry out intra-community transactions are required to register with the tax authorities as EU VAT taxpayers. Upon registration, they will receive a so-called EU VAT number. In this case, the national tax identification number is preceded by the two-letter designation of the EU Member State. In the case of Polish taxpayers, this is the NIP number preceded by the letter PL.