A Warsaw-based technology company posts a modest loss in 2025 – its third consecutive year in the red. The board assumes that no corporate income tax is due. Then an audit letter arrives from the National Tax Administration (Krajowa Administracja Skarbowa, KAS). The issue is not the loss itself. It is the CIT minimum tax, a levy that applies precisely when a company is unprofitable or barely breaks even.

The CIT minimum tax (podatek minimalny) applies to companies registered in Poland whose tax loss or low-income ratio falls below the statutory threshold of 2% of revenue for a given tax year. Introduced under the Corporate Income Tax Act (ustawa o podatku dochodowym od osób prawnych, CIT Act), the tax is calculated on a separate base and is due even when no standard CIT is payable. Certain categories of taxpayers – including small companies, start-ups, and those operating in special economic zones – are explicitly exempt.

This guide explains the mechanics step by step. It covers who is caught, which exemptions apply, how the tax base is calculated, and what procedural steps a company must follow to stay compliant. Three business scenarios illustrate how the rules play out in practice for a manufacturer, an IT firm, and a foreign investor.

What triggers CIT minimum tax liability in Poland?

The minimum tax is triggered when a company either records a tax loss or earns income that represents less than 2% of its revenue in a given tax year. Both conditions are measured after standard CIT adjustments. A company can therefore be commercially profitable yet still fall within the minimum tax regime if its taxable income margin is thin.

The National Court Register (Krajowy Rejestr Sądowy, KRS) records the legal status of the taxpayer, and the KAS uses that data to cross-reference filings. Two separate tests apply. First, the loss test: any tax loss in the year automatically triggers exposure. Second, the profitability test: income divided by revenue must reach at least 2%. Failing either test means the minimum tax rules must be assessed.

Polish tax law calculates the minimum tax base using one of two methods. The standard method adds 1.5% of revenue to excess debt-financing costs, certain intangible service fees paid to related parties, and deferred tax adjustments. An alternative simplified base equals 3% of total revenue. A company may elect the simplified base for a given year – the election is made in the annual CIT return filed with the tax office (urząd skarbowy). Once elected, the simplified base cannot be changed mid-year.

The minimum tax rate is 10% applied to whichever base the company selects. The resulting liability is reduced by any standard CIT paid for the same year. If standard CIT exceeds the minimum tax, no additional payment arises. The minimum tax paid in a given year may be credited against standard CIT in the following three years – a meaningful cash-flow benefit for companies that return to profitability.

One practical point deserves attention early. The revenue figure used in both the 2% profitability test and the standard base calculation excludes certain items – notably income from dividends and income taxed at a flat rate. Companies with significant dividend flows may therefore face a higher exposure than a simple reading of the financial statements suggests.

Which companies are exempt from the minimum tax?

Polish tax law provides a list of categorical exemptions. Meeting any single exemption removes the taxpayer entirely from the minimum tax regime for the relevant year. The exemptions are not automatic in every case – some require a formal declaration in the annual return.

The most widely applicable exemptions are as follows:

  • Companies in their first three tax years of operation (start-up relief).
  • Taxpayers whose revenue fell by more than 30% compared to the previous tax year.
  • Financial institutions – banks, credit institutions, and insurance companies regulated by the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF).
  • Companies whose majority shareholder is a natural person and which have no more than five related-party transactions in the year.
  • Entities operating exclusively in special economic zones or the Polish Investment Zone under a valid permit.

The 30% revenue-decline exemption is particularly relevant for companies affected by supply-chain disruptions or sector downturns. Revenue is compared on a like-for-like basis: the same revenue categories, same accounting treatment. A company that restructured its product mix mid-year should take care that the comparison is methodologically consistent, because KAS auditors scrutinise this calculation closely.

Family foundations (fundacja rodzinna) established under the 2023 legislation are outside the corporate income tax regime for their core statutory activities and are therefore not subject to the minimum tax on those activities. This is a common point of confusion for advisers who encounter the family foundation structure for the first time. The exemption is structural, not discretionary.

Small taxpayers – those whose revenue (including VAT) did not exceed EUR 2 million in the preceding year – are also exempt. The EUR 2 million threshold is converted at the average euro exchange rate published by the National Bank of Poland (Narodowy Bank Polski, NBP) on the first business day of October of the preceding year. For the 2025 tax year, that rate was published in October 2024.

We secured a refund of minimum tax prepayments exceeding PLN 1.8m for a retail client in the Małopolska region (autumn 2025) after demonstrating that the 30% revenue-decline exemption applied. The company had misclassified one revenue stream, which initially appeared to push it above the exemption threshold.

How is the minimum tax base calculated step by step?

Once it is established that no exemption applies, the company must determine its minimum tax base. The calculation has a defined sequence. Skipping any step – or applying the wrong revenue figure – produces an incorrect base and potential underpayment penalties of up to 150% of the tax shortfall under Polish tax law.

Step 1: Determine total revenue from operating activities for the tax year. Exclude dividends, income taxed at a flat rate, and income from the sale of fixed assets. This is the revenue denominator used in the 2% profitability test and the 1.5% component of the standard base.

Step 2: Calculate 1.5% of that revenue. This is the first element of the standard base.

Step 3: Identify excess debt-financing costs. Under transfer pricing rules, interest and similar costs paid to related parties above the statutory safe-harbour threshold (currently 30% of EBITDA) are added to the base. Transfer pricing documentation should be reviewed at this point to confirm the figures used are defensible.

Step 4: Add qualifying intangible service fees paid to related parties – management fees, royalties, certain advisory costs – that exceed the statutory threshold. IP Box income is excluded from this calculation, which matters for technology companies using that regime.

Step 5: Apply the 10% rate to the sum of steps 2–4. Deduct any standard CIT paid for the year. The remainder is the minimum tax due.

The alternative: elect the 3% simplified base. Multiply total operating revenue (same definition as step 1) by 3%, then apply 10%. The simplified base is attractive for companies with high related-party costs that would inflate the standard base significantly. The trade-off is that the simplified base may produce a higher liability for asset-light businesses with few related-party transactions.

A practical checklist before filing:

  • Confirm the revenue figure excludes all statutory exclusions.
  • Verify whether any exemption applies and document the basis.
  • Choose standard or simplified base and record the election in the return.
  • Cross-check related-party transactions against transfer pricing documentation.
  • Calculate the credit for minimum tax paid in prior years against current standard CIT.

For a manufacturing client in Silesia (spring 2026), our team identified that management fees paid to a German parent had been double-counted in both the transfer pricing adjustment and the intangible services component of the standard base. Correcting the calculation reduced the minimum tax liability by approximately PLN 600,000.

Three business scenarios: manufacturing, IT, and foreign investor

Abstract rules become clearer through concrete situations. The three scenarios below cover the most common configurations that arise in practice. Each illustrates a different risk profile and a different compliance pathway.

Scenario 1 – Manufacturing company. A Polish manufacturer with EUR 15 million in revenue posts a tax loss in 2025 due to high energy costs and capital investment. No exemption applies. The company selects the standard base. Its 1.5% revenue component equals PLN 1.05 million (converted at the average NBP rate). It has related-party debt above the EBITDA threshold, adding PLN 200,000. Total standard base: PLN 1.25 million. Minimum tax at 10%: PLN 125,000. No standard CIT was paid, so the full amount is due. The payment deadline is the same as the annual CIT return – the end of the third month after the tax year closes, meaning 31 March 2026 for a calendar-year taxpayer.

Scenario 2 – IT company. A Warsaw-based software firm has revenue of PLN 8 million but earns IP Box income of PLN 3 million taxed at the preferential 5% rate. For the 2% profitability test, IP Box income is excluded from both the numerator and denominator. The remaining revenue is PLN 5 million, and taxable income from non-IP Box activities is PLN 90,000 – well below 2% of PLN 5 million (PLN 100,000). The minimum tax applies. However, because IP Box royalties are excluded from the intangible services add-back, the standard base is lower than it first appears. The simplified base at 3% of PLN 5 million may produce a smaller liability. The company should model both before filing.

Scenario 3 – Foreign investor. A German holding company establishes a Polish subsidiary under a special economic zone permit. The subsidiary operates exclusively within the zone. It is categorically exempt from the minimum tax for all income attributable to zone activities. If the subsidiary also conducts activities outside the zone – even minor administrative functions – those revenues and costs must be ring-fenced. Mixed-activity subsidiaries should maintain separate accounting records from day one. The KAS has challenged allocations in several audits where zone and non-zone activities were commingled.

Understanding how KSeF Poland requirements interact with CIT filings is increasingly relevant for all three scenarios. Electronic invoicing data submitted through KSeF feeds directly into JPK_CIT reconciliations, and discrepancies between invoice data and declared revenue attract automated KAS queries. For more on KSeF obligations, see our analysis of what KSeF means for your business.

For companies involved in M&A or group restructuring, the minimum tax interacts with merger control timelines. A target company's minimum tax position is a due diligence item that affects valuation. Our overview of UOKiK merger control thresholds and timelines addresses how deal timelines are structured in the Polish context.

To receive an expert assessment of your company's minimum tax exposure, contact info@kordeckipartners.com. We will review your revenue structure, identify applicable exemptions, and model both calculation methods before your filing deadline.

What are the most common mistakes and how can they be avoided?

The minimum tax regime has been in force in its current form since 2024, following amendments that delayed and then revised the original 2022 rules. Many companies are filing under it for the first time. Several recurring errors have emerged from our work with clients across sectors.

Mistake 1 – Failing to assess exemptions before calculating the base. Some companies spend time on complex base calculations only to discover after filing that an exemption applied. The 30% revenue-decline exemption and the small taxpayer threshold should be checked first. If an exemption applies, no further calculation is needed, and declaring it in the return closes the issue.

Mistake 2 – Using the wrong revenue figure. The revenue used in the 2% test and the 1.5% base component is not the same as accounting revenue or the revenue reported in the VAT return. Statutory exclusions apply. Companies that use their P&L revenue figure without adjustment frequently overstate or understate the base.

Mistake 3 – Ignoring the interaction with transfer pricing. The minimum tax base explicitly incorporates related-party debt costs and intangible service fees. A company that has not prepared transfer pricing documentation – or whose documentation does not support the arm's-length character of related-party charges – faces a double exposure: a minimum tax add-back and a potential transfer pricing adjustment. Both risks materialise in the same audit.

Mistake 4 – Missing the credit opportunity. Minimum tax paid in a given year can be credited against standard CIT in each of the following three years. Companies that return to profitability sometimes fail to apply this credit in their subsequent returns, effectively paying twice. The credit must be actively claimed – it is not applied automatically by the tax office.

Mistake 5 – Misclassifying related-party transactions. Not all payments to group companies trigger the intangible services add-back. Payments for physical goods, financial instruments covered by separate rules, and certain regulated services are excluded. Misclassification in either direction – including too much or too little – distorts the base. A tax advisor Warsaw-based or otherwise should review the classification before the return is filed.

Compliance with double tax treaty provisions also affects the minimum tax analysis for foreign-owned Polish subsidiaries. Interest and royalty withholding tax rates set by treaty interact with the minimum tax base components. Our article on the double tax treaty between Poland and key provisions addresses the treaty framework that applies alongside domestic minimum tax rules.

Specific minimum tax exposure warrants a structured review – not a generic checklist. Each company's revenue mix, related-party structure, and prior-year tax position produces a different liability profile. Leaving that analysis to the last week before the filing deadline forfeits the option to restructure transactions or elect the more favourable base method.

For a tailored strategy on minimum tax compliance and base optimisation, reach out to info@kordeckipartners.com.

Frequently asked questions

Q: If my company qualifies for IP Box, does that protect it from the minimum tax entirely?

A: No. IP Box income is excluded from the revenue and income figures used in the 2% profitability test, but that exclusion can make it easier – not harder – to fall below the 2% threshold on remaining activities. A company with significant IP Box income and modest non-IP Box profits may find that the non-IP Box portion of the business fails the profitability test and triggers minimum tax on that portion. The IP Box and minimum tax regimes must be modelled together, not treated as mutually exclusive.

Q: How long does a KAS audit of the minimum tax calculation typically take, and what does it cost to defend?

A: A KAS audit focused on the minimum tax base typically runs between six and eighteen months from the initial query to a final decision. The audit covers documentation of the revenue figure, related-party transaction classifications, and the choice of calculation method. Legal and advisory costs for a medium-complexity audit range from PLN 30,000 to PLN 120,000 depending on the volume of related-party transactions and whether the matter proceeds to the Administrative Court (Wojewódzki Sąd Administracyjny, WSA). Investing in a pre-filing review is materially cheaper than defending an audit.

Q: Is it true that the minimum tax does not apply to companies with a natural-person majority shareholder?

A: Partly true, and the conditions matter. The exemption applies only where the company's shares are held, directly or indirectly, solely by natural persons and where the company has no related-party transactions above de minimis thresholds during the year. In practice, this exemption covers simple, single-owner structures without group affiliations. Once a Polish company becomes part of a group – even informally, through shared management or intercompany loans – the conditions for this exemption may no longer be met. The exemption should be verified each year, not assumed to be permanent.

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 corporate tax advisory, CIT minimum tax compliance, and tax-court litigation. 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.