A German parent company receives a routine query from its Warsaw-based subsidiary: has the Polish entity filed its annual corporate income tax return, registered for the mandatory e-invoicing system, and updated its transfer pricing documentation? The subsidiary's finance team hesitates. Three separate obligations, three separate deadlines – and missing any one of them triggers penalties that cannot be undone retroactively.

Foreign subsidiaries operating in Poland face a layered set of Corporate Income Tax (CIT) obligations that have been substantially tightened since 2024. Polish tax law now combines mandatory e-invoicing under the National e-Invoicing System (Krajowy System e-Faktur, KSeF), enhanced transfer pricing disclosure rules, and a revised minimum CIT charge for low-profit entities. Subsidiaries with annual revenue exceeding PLN 2m are subject to the full compliance stack. Failure to meet any of these requirements exposes the board to personal liability and forfeits the right to deduct certain costs.

This alert covers three areas: what has changed in Polish CIT rules, which subsidiaries are affected and at what thresholds, and the immediate action items your entity should complete before the next filing window closes.

What has changed in Polish CIT rules since 2024?

Polish CIT legislation has introduced three significant changes that directly affect foreign-owned subsidiaries. First, the minimum CIT charge now applies to companies that report a tax loss or whose income-to-revenue ratio falls below 2%. The charge equals 10% of an adjusted base and cannot be offset against prior-year losses in the same settlement. Second, KSeF Poland moves from voluntary to mandatory status for VAT-registered taxpayers – the structured invoice obligation affects every entity issuing B2B invoices domestically. Third, transfer pricing documentation thresholds were recalibrated, lowering the transaction value at which a local file becomes obligatory for transactions with related parties.

The National Revenue Administration (Krajowa Administracja Skarbowa, KAS) has increased the frequency of cross-referencing JPK_CIT data against transfer pricing master files. Discrepancies now trigger automatic risk-scoring. Entities flagged by the scoring algorithm receive a structured query within 30 days – and the response window is tight. The Tax Office (Urząd Skarbowy) expects a substantive reply within 14 days of that query.

One further change concerns withholding tax (WHT). Payments of dividends, interest, and royalties to a foreign parent exceeding PLN 2m per year now require the subsidiary to apply the pay-and-refund mechanism. The subsidiary withholds at the standard rate and the parent must file a separate refund application. This process can take up to six months, affecting group cash flow materially.

Which subsidiaries are affected – and at what thresholds?

Not every foreign subsidiary faces the full compliance burden. Polish tax law applies different rules depending on revenue size, ownership structure, and the nature of intercompany transactions. Understanding which threshold applies to your entity determines the scope of work required before the filing deadline.

The minimum CIT charge applies to entities whose adjusted income-to-revenue ratio falls below 2% or that report a CIT loss for the year. Subsidiaries with revenue below PLN 2m are exempt, as are entities in their first three years of operation. Companies in restructuring proceedings – a point relevant to the pre-pack sale procedure in Poland – may also qualify for a temporary exemption during the restructuring period.

Transfer pricing obligations attach at lower thresholds. A local file is required when the value of a controlled transaction exceeds PLN 10m for commodity or financial transactions, or PLN 2m for service and other transactions. Any subsidiary receiving management fees, IP licences (including IP Box arrangements), or intercompany loans from its parent should assume the threshold is met and prepare documentation accordingly. The National Court Register (Krajowy Rejestr Sądowy, KRS) filing history is cross-checked by KAS to verify the date a related-party relationship was established.

We secured a reversal of a transfer pricing surcharge exceeding PLN 1.8m for a technology subsidiary in the Mazowieckie region (autumn 2025). The documentation gap was identified during a pre-filing review – not during a KAS audit. Early identification made the difference.

What are the immediate action items before the CIT filing deadline?

The annual CIT return (CIT-8) is due by the end of the third month following the tax year end. For calendar-year taxpayers, that means 31 March. Extensions are available but must be applied for before the original deadline – a missed extension request forfeits the option entirely. The following checklist covers the minimum steps a foreign subsidiary should complete now.

  • Confirm whether the minimum CIT charge applies and calculate the adjusted base before the filing date.
  • Verify that all B2B invoices issued since KSeF activation are structured-format compliant.
  • Prepare or update transfer pricing local files for any controlled transaction exceeding the applicable threshold.
  • Review WHT payments to the parent and determine whether the pay-and-refund mechanism was correctly applied.
  • Cross-check JPK_CIT data against the general ledger to eliminate discrepancies before KAS risk-scoring runs.

For subsidiaries exploring preferential regimes, the IP Box rate of 5% on qualifying intellectual property income requires a separate calculation schedule attached to the CIT-8. This schedule must be prepared before the return is filed – it cannot be added by amendment without triggering a review. A tax advisor Warsaw-based or operating under Polish tax law should verify the qualifying IP income calculation independently. Details on how Poland's treaty network affects the parent's position are covered in our analysis of the double tax treaty between Poland and the United States.

For subsidiaries that also issue invoices to Spanish group entities, the KSeF timeline intersects with Spanish e-invoicing obligations. Our separate analysis of the KSeF deadline timeline for companies in Spain sets out how the two systems interact. Foreign-owned entities operating across both jurisdictions should align their compliance calendars now.

Our team obtained a successful WHT refund of over EUR 400,000 for a Dutch holding company's Polish subsidiary in Lower Silesia (spring 2026). The refund application required coordinated documentation from both the Polish entity and the Dutch parent – a process that took four months from submission to payment.

A specific compliance gap in your subsidiary's CIT position can become irreversible once a KAS audit opens. At that point, voluntary disclosure options close and penalty exposure – which reaches 720% of the standard rate for deliberate omissions – cannot be reduced by late corrective filings.

To receive an expert assessment of your subsidiary's CIT compliance position before the 31 March deadline, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a foreign subsidiary use a family foundation structure to reduce its Polish CIT exposure?

A: A Polish family foundation is a separate legal entity designed for wealth succession, not for operational tax planning by foreign subsidiaries. The foundation's income from permitted activities is taxed at 15% upon distribution, not at the standard 19% CIT rate. However, using a family foundation as an intermediate holding layer for a trading subsidiary requires careful analysis of the controlled foreign corporation rules under Polish tax law.

Q: How long does a KAS transfer pricing audit typically take, and what does it cost?

A: A transfer pricing audit by the National Revenue Administration typically runs between 6 and 18 months from the opening decision to a final assessment. Direct costs include professional fees for documentation preparation and representation, which vary by transaction complexity. The more significant cost is management time – KAS routinely requests interviews with finance directors and detailed transaction records going back five years.

Q: Is it a misconception that subsidiaries with losses are not subject to CIT obligations?

A: Yes – this is a common misunderstanding. A loss-making subsidiary is still required to file the CIT-8 return on time, maintain transfer pricing documentation if thresholds are met, and – since the minimum CIT charge was introduced – may owe tax even in a loss year. The minimum charge applies to the adjusted base, not to taxable income, so a reported loss does not eliminate the liability.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to CIT compliance, transfer pricing, KSeF onboarding, and cross-border tax structuring. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.