A Warsaw-based technology group discovered, eighteen months before its parent's consolidated revenue crossed the EUR 750 million threshold, that its Polish subsidiary had no process in place for the global minimum tax. The finance director assumed the obligation rested entirely with the parent. It did not. Polish corporate tax legislation – amended to transpose the EU Minimum Tax Directive – places specific local compliance duties on Polish entities, regardless of where the top-up tax is ultimately collected. That discovery triggered an urgent internal review.

Under Polish tax law, Polish subsidiaries of multinational groups with consolidated annual revenue above EUR 750 million must track their effective tax rate (ETR) and prepare local data for the global minimum tax calculation. The obligation applies from financial years beginning on or after 1 January 2025. Failure to meet reporting deadlines or to supply correct data to the group exposes the Polish entity to surcharges and, in serious cases, personal liability of board members.

This case study traces how one Polish subsidiary moved from zero readiness to full compliance in eleven months. The background, the strategy adopted, the process steps, and the transferable lessons are set out below. Names and specific financial figures have been anonymised at the client's request.

What was the starting position of the Polish subsidiary?

The client – a Polish limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o.) registered with the National Court Register (KRS) – formed part of a technology group headquartered in the Netherlands. The group's consolidated revenue had remained just below EUR 750 million for three consecutive years. Internal projections showed the threshold would be crossed in the financial year beginning January 2025.

The Polish entity contributed roughly 12 percent of group revenue. It benefited from the IP Box regime, which reduces the effective rate on qualifying intellectual property income to 5 percent. That low rate immediately raised a flag: under the global minimum tax framework, a 5 percent ETR on a material income stream sits well below the 15 percent minimum. A top-up charge was almost certain unless the subsidiary could demonstrate sufficient substance or invoke a transitional safe harbour.

Two further complications arose. First, the Polish entity had significant intercompany transactions subject to transfer pricing documentation requirements. Second, the group had no centralised data architecture capable of extracting the financial data that Polish corporate tax law now requires for the qualified domestic minimum top-up tax (QDMTT) calculation. Both gaps needed closing before the first reporting deadline.

How was the compliance strategy designed?

The advisory team at KORDECKI & Partners began with a gap analysis across three dimensions: data availability, ETR exposure, and governance. That analysis took four weeks and produced a prioritised action list. The first priority was the transitional safe harbour – specifically the simplified ETR test based on Country-by-Country Report (CbCR) data already filed with the Polish tax authority, Krajowa Administracja Skarbowa (National Revenue Administration, KAS).

Under the transitional rules applicable for financial years 2025 through 2026, a Polish entity may avoid a detailed QDMTT calculation if its simplified ETR – computed from CbCR figures – equals or exceeds 15 percent. For this client, the simplified ETR came in at 13.8 percent, just below the threshold. The safe harbour was unavailable. That result, while unwelcome, clarified the scope of work: a full GloBE (Global Anti-Base Erosion) income calculation was required.

The strategy then focused on three instruments. First, a substance-based income exclusion (SBIE) – covering eligible payroll costs and the carrying value of tangible assets – to reduce the top-up base. Second, a review of the IP Box position to assess whether restructuring the qualifying income stream could raise the blended ETR. Third, preparation of a local QDMTT return to pre-empt any federal top-up collected at parent level. We secured a reduction in the projected top-up liability exceeding PLN 3.5 million for this client in Mazowieckie region (autumn 2025), primarily through accurate SBIE computation.

What did the eleven-month process involve?

Month one through three focused on data architecture. The Polish entity's finance team, supported by our tax practice, mapped every general ledger account to the GloBE income categories. Polish accounting records follow the ustawa o rachunkowości (Accounting Act) format, which does not align directly with IFRS-based GloBE inputs. A bridging schedule – reconciling Polish statutory accounts to GloBE financial accounts – became the core working document. That schedule required sign-off from both the local auditor and the group's consolidation team.

Months four through six addressed the SBIE calculation. Eligible payroll costs required separating remuneration attributable to qualifying employees from amounts paid to contractors. Polish labour law – enforced by the Państwowa Inspekcja Pracy (State Labour Inspectorate, PIP) – draws a clear line between employment contracts and civil-law contracts. Only employment-contract costs count for SBIE purposes. The subsidiary had a mixed workforce. Reclassifying approximately 30 contractor relationships to employment status (a step already under consideration for labour-law reasons) increased the SBIE payroll base and reduced the top-up exposure.

Months seven through eleven covered the QDMTT return preparation and group coordination. The Polish entity filed a preliminary information return within the statutory deadline. Coordination with the Dutch parent was essential: the parent needed the Polish QDMTT data to complete its own Income Inclusion Rule (IIR) filing. A shared data room, updated monthly, eliminated the back-and-forth that had caused delays in a parallel German subsidiary. Our team also reviewed the double tax treaty between Poland and the Netherlands – see our analysis at Double Tax Treaty between Poland and the Netherlands: Key Provisions – to confirm that treaty provisions did not interact adversely with the QDMTT mechanism.

What lessons transfer to other Polish subsidiaries?

Four lessons emerged clearly from this engagement. They apply to any Polish sp. z o.o. or spółka akcyjna (joint-stock company, S.A.) that forms part of a qualifying multinational group.

  • Start the gap analysis at least twelve months before the first affected financial year. Data gaps take longer to close than legal questions.
  • Test the transitional safe harbour early. If the simplified ETR falls below 15 percent, budget for a full GloBE calculation – the effort is substantial.
  • Treat workforce classification as a Pillar Two issue, not only a labour-law issue. Contractor-to-employee reclassification can materially increase the SBIE base.
  • Establish a live data room shared with the group's consolidation team. Monthly updates prevent the year-end scramble that drives errors and penalties.

A second micro-case reinforces the group-coordination point. Our team obtained agreement on a corrected CbCR allocation for a manufacturing subsidiary in Lower Silesia (spring 2026), recovering an overstated top-up charge of approximately EUR 800,000 that had arisen from a misclassification of deferred tax liabilities. The correction required coordinated filings by both the Polish entity and the parent – neither could act alone. For groups with complex intercompany structures, reviewing transfer pricing documentation before the GloBE calculation is finalised is not optional. Our corporate and M&A practice note on Polish entry structuring – available at Corporate & M&A – Poland – addresses how holding structures affect the ETR from the outset.

Groups with US parent companies face an additional layer. The United States has not enacted domestic GloBE legislation. A Polish subsidiary of a US-parented group may therefore face a QDMTT collected in Poland with limited or no offset available at parent level. Our analysis of the Poland–US tax treaty – see Double Tax Treaty between Poland and the United States: Key Provisions – sets out the treaty framework relevant to this scenario.

What to prepare before your first Pillar Two compliance cycle:

  • Consolidated revenue figures for the three most recent financial years, to confirm threshold exposure.
  • CbCR data filed with KAS, for the simplified ETR test.
  • Payroll analysis distinguishing employment contracts from civil-law contracts.
  • Fixed-asset register with carrying values, for the SBIE tangible-asset component.
  • Contact details of the group's consolidation team and their filing calendar.

Pillar Two is not a single filing event. It is an ongoing compliance cycle. Polish tax law requires annual recalculation, and KAS has signalled active scrutiny of QDMTT returns from the 2026 filing season onward. A tax advisor Warsaw-based or otherwise needs to be embedded in the process from data collection through to submission – not brought in at year-end to fix errors.

Your company's specific Pillar Two position depends on facts that vary by industry, workforce structure, and group architecture. Acting on generic assumptions forfeits the SBIE reductions and safe harbour options that can materially lower the top-up charge – and that opportunity does not reopen after the filing deadline passes.

To receive an expert assessment of your Polish subsidiary's Pillar Two exposure and compliance readiness, contact info@kordeckipartners.com. Our tax practice will review your CbCR data, ETR position, and SBIE eligibility, and coordinate with your group's consolidation team to deliver a filing-ready output.

Frequently asked questions

Q: Does the Pillar Two obligation apply to the Polish subsidiary directly, or only to the parent company?

A: Polish tax legislation places the qualified domestic minimum top-up tax obligation directly on the Polish entity. The parent company may collect a top-up under the Income Inclusion Rule, but the Polish QDMTT is a separate local liability. Both can arise simultaneously if the Polish QDMTT return is not filed correctly or on time.

Q: How long does a Polish subsidiary have to file its QDMTT return, and what does it cost to miss the deadline?

A: The preliminary information return must be filed within fifteen months of the end of the first affected financial year (eighteen months for the first transitional year). A missed deadline triggers a default surcharge calculated per day of delay. Beyond the surcharge, late or incorrect returns attract heightened KAS audit scrutiny, which carries its own cost in management time and potential adjustments.

Q: Can the IP Box regime coexist with Pillar Two, or must a company choose between them?

A: The two regimes coexist – a Polish company does not forfeit the IP Box preferential rate by being subject to Pillar Two. However, the 5 percent IP Box rate on qualifying income reduces the blended ETR, making a top-up charge more likely. The correct response is accurate SBIE computation and, where possible, structural review of the qualifying income stream – not abandonment of the IP Box position. A tax advisor should model both scenarios before any restructuring decision is made.

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 tax compliance, including Pillar Two, KSeF Poland implementation, transfer pricing, and family foundation 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.