Corporate income tax, known as CIT (corporate income tax), is one of the most important direct taxes in the Polish tax system. This comprehensive guide presents all the key aspects of this tax, from the basic rules to detailed settlement procedures.
What corporate income tax is
Corporate income tax is a direct tax on income earned by companies and other economic entities. The rules are set out in detail in the Corporate Income Tax Act of 15 February 1992. Unlike PIT (personal income tax), which applies to natural persons, CIT focuses mainly on capital companies, such as joint-stock companies (spółka akcyjna) and limited liability companies (sp. z o.o.).
The CIT Act of 15 February 1992 (consolidated text: Dz.U. (Journal of Laws) 2026 item 554) is the legal basis for all tax settlements of legal persons in Poland. It governs not only the amount of tax, but also how it is calculated, payment deadlines and available exemptions and reliefs
This tax plays a key role in public finances, being a significant source of budget revenue. It is designed to tax economic entities fairly, in proportion to their actual income, while taking business costs into account.
The CIT system is also flexible, offering different forms of settlement and preferential rates for smaller businesses. This variety allows the tax burden to be adjusted to the nature and scale of each entity's activity.
Who is subject to CIT
Under Article 1 of the CIT Act, the range of corporate income taxpayers is broad and covers various organisational forms. The core group consists of legal persons, which by law have legal capacity and can acquire rights and incur obligations on their own.
Capital companies in organisation are subject to CIT from the moment the articles of association are concluded (when the company in organisation comes into existence), even before entry in the KRS (National Court Register) and acquiring legal personality. This means that any income earned during the organisation period is also taxed under the CIT Act
Organisational units without legal personality may also be subject to CIT, except for an enterprise in probate (przedsiębiorstwo w spadku) and partnerships without legal personality. A special category consists of limited partnerships (spółka komandytowa) and limited joint-stock partnerships (spółka komandytowo-akcyjna) with their registered office or management in Poland (limited partnerships since 2021), and – under certain conditions – general partnerships (spółka jawna) whose partners are not exclusively natural persons (Article 1 section 3 points 1 and 1a of the CIT Act).
- Legal persons of all types operating in Poland
- Capital companies in organisation, before registration
- Organisational units without legal personality, with certain exceptions
- Limited partnerships and limited joint-stock partnerships with their registered office or management in Poland (conditionally also general partnerships)
- Foreign companies treated as legal persons in their own countries
- Tax capital groups consisting of at least two companies
Another important category consists of companies without legal personality with their registered office or management in another country, provided that under that country's tax law they are treated as legal persons and are taxed on their worldwide income.
Tax capital groups (podatkowe grupy kapitałowe) are a special form of taxation allowing capital-linked companies to settle tax jointly. A group must consist of at least two commercial companies with legal personality that are linked by certain capital ties
Exclusions from CIT
The CIT Act provides for a number of exclusions that define the scope of this tax. Revenue from agricultural activity is generally not subject to CIT, except for income from special branches of agricultural production, which are treated differently because of their industrial nature.
Revenue from forestry is also excluded from CIT, which results from the specific nature of this sector and the separate rules on state and private forests. Revenue from activities that cannot be the subject of a legally valid contract is treated in the same way.
| Type of revenue | Tax status | Legal basis | Special notes |
|---|---|---|---|
| Agricultural activity | Excluded | CIT Act | Except special branches |
| Forestry | Excluded | CIT Act | All forestry revenue |
| Tonnage tax | Excluded | Separate provisions | Ship operators only |
| Shipbuilding industry | Excluded | Activation Act | Special rules |
Special rules apply to ship operators taxed under the tonnage tax and to shipbuilding entrepreneurs, who benefit from preferential rules under the Act on the activation of the shipbuilding industry and complementary industries. These exclusions are intended to support strategic sectors of the economy.
Payments referred to in Article 27 of the Act on succession management of a natural person's enterprise are also not subject to CIT. This solution is intended to facilitate succession in family businesses and ensure business continuity
Subjective exemptions in CIT
Article 6 of the CIT Act lists the entities exempt from paying this tax and filing tax returns. At the top of the list is the State Treasury, which follows from the basic principles of public finances.
The National Bank of Poland, as the country's central bank, is also subjectively exempt, as are budgetary units financed directly from the state budget or local government budgets. State special-purpose funds within the meaning of the Public Finance Act are also exempt.
- The State Treasury as the basic public authority entity
- The National Bank of Poland in all its functions
- Budgetary units financed from public funds
- State special-purpose funds within the meaning of the Public Finance Act
- International enterprises set up under international agreements
- Local government units within a certain scope of income
Local government units have a special position, as they are exempt only in respect of income specified in the Act on local government revenue. This means that other forms of business activity carried out by local governments may be subject to CIT.
The Agency for Restructuring and Modernisation of Agriculture, ZUS (Social Insurance Institution), pension funds, open-ended investment funds and specialised open-ended investment funds, and the Government Agency for Strategic Reserves are examples of specialised state institutions covered by the subjective exemption. The exemption results from their special role in the state's social and economic security system
The exempt entities also include the National Health Fund, the Bank Guarantee Fund, the National Agricultural Support Centre and the National Real Estate Resource. The list is completed by technical inspection bodies and the Polish Audit Oversight Agency, which underlines the systemic importance of these institutions.
Taxable base and calculation of income
The subject of corporate income tax is income that is the sum of two main components: income from capital gains and income from other sources of revenue. This structure covers all forms of the entity's business activity comprehensively.
Under Article 7 section 2 of the CIT Act, income is the surplus of total revenue over the costs of obtaining it, earned in the tax year. If tax-deductible costs exceed total revenue, the difference is a tax loss, which can be used to reduce future income.
Practical example: the limited liability company "ABC" earned revenue of PLN 2 million in the tax year. Its tax-deductible costs were PLN 1.6 million. Taxable income is therefore PLN 400 thousand, on which CIT will be charged at the applicable rate.
For tax capital groups, the mechanism for determining income is more complex. Income is grouped by sources of revenue and losses, which means that when determining income, the total income of all capital companies in the group and the total losses incurred by those companies from a given source of revenue are taken into account.
If, in a tax year, the total losses of the companies forming a tax capital group from a given source of revenue exceed their total income from that source, the difference is a loss of the whole group (Article 7a section 1 of the CIT Act). This loss can then be settled in subsequent tax years under the general rules for settling losses in CIT
Objective exemptions in CIT
Article 17 of the CIT Act lists the objective tax exemptions, which concern specific types of income regardless of who earns it. One of the most important is income from the sale of all or part of a property forming part of a farm.
However, this exemption has an important time limit – it does not apply to income from a sale made before 5 years have passed from the end of the calendar year in which all or part of the property sold was acquired. This rule is intended to prevent speculative transactions on the agricultural property market.
The activity of employers' organisations and political parties is exempt in the part allocated to statutory purposes, excluding business activity. Similar rules apply to income from running schools in the part allocated to the school's purposes and to income of public benefit organisations in the statutory part.
The income of church legal persons is objectively exempt under Article 17 section 1 point 4a of the CIT Act. The exemption covers income from non-business statutory activity, while income from other activity is exempt only in the part allocated to the purposes listed in the Act, including religious worship and educational, scientific, cultural and charitable purposes
A special category is the income of rural women's associations (koła gospodyń wiejskich) in the part allocated to statutory purposes. This exemption supports the development of local rural communities and encourages social and economic initiatives in rural areas.
Settling tax losses
The rules for settling tax losses in CIT are set out in detail in Article 7 section 5 of the CIT Act. If an entity incurred a loss in a given tax year, it can reduce future income by the amount of this loss in one of two alternative ways.
The first way is to reduce income over the next five tax years, with the deduction in any one of those years not exceeding 50% of the amount of the loss. This allows the tax burden to be managed flexibly depending on the entity's financial situation.
- Analyse the amount of the tax loss incurred in the year
- Choose the settlement strategy – spread out or one-off up to the limit
- Check that the source of the loss matches the source of future income
- Calculate the maximum amount deductible in each year
- Document the settlement process for tax audit purposes
The second way allows a one-off reduction of income in one of the next five tax years by an amount not exceeding PLN 5 million. The amount not deducted is settled in the remaining years of the five-year period, but the deduction in any one of those years cannot exceed 50% of the amount of the loss.
A loss can be settled only within the same source of revenue from which it arose. This means that a loss from other sources of revenue cannot be settled by reducing income from capital gains. This rule ensures transparency and fairness of the tax system
Practical example of settling a loss: XYZ incurred a tax loss of PLN 6 million from other sources of revenue in 2019. In 2020 it earned income from other sources of revenue of at least PLN 5 million. It can settle the loss in one go, reducing its income by up to the PLN 5 million limit in 2020, and settle the remaining PLN 1 million in the following 4 tax years, provided it earns sufficient income.
An important restriction introduced in Article 7 section 6 of the Act is that losses from the paid disposal of virtual currencies cannot be settled. Revenue from exchanging a virtual currency for a means of payment, goods, a service or a property right is revenue from capital gains, but losses on this account cannot be settled against future income.
CIT rates and preferences for small taxpayers
Under Article 19 of the CIT Act, the tax system provides for two basic corporate income tax rates. The standard rate is 19% of the tax base and applies to most CIT payers carrying out business activity in Poland. From 1 January 2026 banks, cooperative banks and cooperative savings and credit unions have separate, higher rates (Article 19 section 1 points 3–5 and Articles 38aa–38ac of the Act; e.g. banks – 30% in 2026, reduced in subsequent years to 23%). The tax is settled annually in a return – we explain separately who files the CIT-8 return.
The preferential rate of 9% of the tax base is available to taxpayers meeting certain revenue criteria. It applies to revenue other than capital gains for taxpayers whose revenue in the tax year did not exceed the PLN equivalent of EUR 2 million (converted at the NBP rate from the first working day of the tax year). In addition, the taxpayer must have small taxpayer status or be starting a business – in that case in the year it starts (Article 19 sections 1d–1e), while Article 19 sections 1a–1c exclude, among others, some entities created by transformation or by contribution of an enterprise.
Small taxpayer status for CIT applies to entities whose sales revenue (including output VAT) did not exceed the equivalent of EUR 2 million in the previous tax year. The limit is converted at the average NBP exchange rate from the first working day of October of the previous tax year, rounded to PLN 1,000
Since 1 January 2020 the limit for small taxpayer status for CIT has been EUR 2 million, which means that in 2026 a small taxpayer is an entity whose sales revenue in 2025 did not exceed PLN 8,517,000. In 2027 it will be an entity whose sales revenue in 2026 does not exceed PLN 8,754,000.
| CIT rate | Conditions | Revenue limit | Restrictions |
|---|---|---|---|
| 19% | Standard rate | No limit | All entities |
| 9% | Small taxpayers | Up to EUR 2 million | Does not apply to capital gains |
| 19% | Capital groups | No limit | No preference |
An important restriction is that the reduced rate of 9% does not apply to tax capital groups or family foundations (Article 19 section 1b). Tax capital groups pay the standard rate of 19% (and if the group includes a bank, the bank rate applies to the part attributable to the bank).
CIT advances and forms of settlement
The system of corporate income tax advances is designed to ensure regular revenue for the state budget during the tax year. Taxpayers and payers do not have to file tax returns during the year, but must pay monthly advances by the 20th of the following month (Article 25 sections 1 and 1a). Small taxpayers and taxpayers starting a business – in their first tax year – may pay quarterly advances (Article 25 section 1b). For companies, we keep full accounting books, calculate CIT advances and prepare the CIT-8 return – see our accounting for companies.
Under Article 25 section 6 of the CIT Act, taxpayers can pay advances in a simplified form. The advances are then based on the tax due shown in the return filed in the year preceding the tax year or in the return filed two years before the tax year.
A simplified advance is 1/12 of the tax due shown in one of the returns for previous years. If the taxpayer started a business for the first time in the year preceding the tax year or in the tax year, or showed no tax due in either of these two returns, simplified advances are not possible
If you choose simplified advances, you do not have to file any additional statements or applications with the tax office, but you must use this form for the whole tax year. You indicate that you used simplified advances only in the annual return for the year in which you used them (Article 25 sections 7 and 7a).
- Monthly advances (for small taxpayers and those starting a business – also quarterly) calculated on current income
- Simplified advances of 1/12 of the tax for previous years
- Exemption from paying advances for some small entrepreneurs starting a business
- Possibility of spreading tax payment over 5 years in certain cases
Another facility for small entrepreneurs starting a business is the exemption from paying corporate income tax advances for the tax year following the first (or second) year of activity (Article 25 section 11). The condition is to file the relevant statement with the head of the competent tax office by the 20th day of the first month of the tax year covered by the exemption. The Act also sets additional conditions – among others, employing, before the year of the exemption, at least 5 people under employment contracts (full-time equivalent) and average monthly revenue of at least EUR 1,000 – and the exemption is de minimis aid (Article 25 sections 13–17).
Taxpayers using the exemption from advances must file an annual return for the year of the exemption and pay the tax over the next five tax years. The tax is payable each year at 20% of its amount, which spreads the financial burden over time
Reporting obligations and payment deadlines
Under Article 25 section 18 of the CIT Act, taxpayers do not have to pay corporate income tax advances if the tax due on income earned since the beginning of the year, less the advances paid since the beginning of the year, does not exceed PLN 1,000. This simplifies procedures for entities with low turnover.
The taxpayer's basic obligations include filing a return showing the income or loss for the tax year by the end of the third month of the following year. By the same deadline, the taxpayer must pay the corporate income tax due or the difference between the tax due and the advances paid during the year.
- Keep records of revenue and costs throughout the tax year
- Calculate and pay monthly CIT advances
- Prepare the annual tax return by the end of March
- Pay any additional tax by the deadline for filing the return
- Keep tax documents for the statutory period
Under Article 27 section 1c of the CIT Act, the annual return must be filed electronically. This speeds up the processing of returns by the tax administration and reduces the risk of errors from manual data entry.
Since 1 January 2020 corporate income tax has been paid to the tax office into a special individual tax micro-account (mikrorachunek podatkowy). Each taxpayer has an individual micro-account number generated from their NIP (tax identification number) (or PESEL (national ID number)); the type of tax and the settlement period are indicated in the transfer details
The tax micro-account system greatly improves the identification of payments and their automatic allocation to the right taxpayers. This reduces problems with incorrectly described transfers and speeds up the settlement of tax liabilities.
