Lump-sum taxation beyond the original framework
Estonian CIT is the informal name for Poland’s lump-sum tax on company income. Eligibility should not be assessed against the rules from the system’s first year. In 2022, the PLN 100 million revenue threshold and mandatory investment expenditure were abolished, and the regime was extended to further company forms. Those historical restrictions no longer determine eligibility.
Which companies can use it?
The regime may cover Polish limited liability companies, joint-stock companies, simple joint-stock companies, limited partnerships and partnerships limited by shares that meet the statutory conditions. Relevant factors include an ownership structure comprising individuals only, revenue composition, employment, equity interests held and accounting rules. Exceptions and exclusions apply, including to certain reorganisations. Having the right legal form alone is insufficient.
Rates and the small taxpayer threshold
The lump-sum tax is 10% of the tax base for small taxpayers and entities starting operations, and 20% in other cases. These are the company’s tax rates; they do not necessarily represent the combined tax burden of the company and its owners.
Small taxpayer status depends on sales revenue including VAT for the preceding year. The threshold is the equivalent of EUR 2 million; for 2026 it is PLN 8,517,000. Exceeding this threshold differs from exceeding the former eligibility ceiling: it affects small taxpayer status and the applicable rate.
Tax extends beyond dividends
Hidden profits, non-business expenses, undisclosed business transactions and certain reorganisation events may also be taxable. Retaining profit in the company therefore does not mean that every payment or benefit to an owner will remain untaxed.
Entering the regime
The election requires a ZAW-RD notification, generally by the end of the first month of the first year of lump-sum taxation. Entering during a year requires additional accounting steps. The election covers four years, subject to statutory rules on extension, withdrawal and loss of eligibility.
What should you calculate before deciding?
- Compare planned distributions to owners with amounts retained to develop the business.
- Review agreements with owners and related parties, including financing and use of assets.
- Check the starting data: books, losses, ownership structure, employment and planned organisational changes.
- Model both remaining in the regime and leaving it. Do not base the decision solely on a comparison of nominal rates.
This is a guide to issues for analysis, not confirmation that a particular company qualifies. Assessing the effects of benefits, exclusions and reorganisations requires checking the documents, provisions and interpretations relevant to the planned transaction.
