A Polish manufacturing company decides to move its headquarters to the Netherlands. The shareholders assume the process is purely administrative. Three months later, the company receives a tax assessment for several million zlotys – an exit tax charge triggered at the moment of transfer. Nobody had planned for it.

Polish exit tax applies when a taxpayer transfers assets, tax residency, or a business to another jurisdiction, causing Poland to lose its right to tax future gains on those assets. The charge is levied on unrealised appreciation – the difference between market value and tax cost at the moment of departure. Both corporate and individual taxpayers face this obligation, with rates of 19% for companies and either 19% or 3% for individuals depending on asset type.

This page explains when exit tax is triggered under Polish tax law, which assets and taxpayers fall within its scope, what planning instruments reduce or defer the charge, and where cross-border structures create the greatest risk. It also sets out a practical self-assessment checklist for owners and advisers preparing a restructuring or relocation.

What transactions trigger exit tax under Polish law?

Exit tax in Poland is not limited to physical relocation. It can be triggered by three distinct events: transfer of tax residency outside Poland, transfer of an asset from a Polish permanent establishment to a foreign head office or foreign branch, and transfer of an asset that results in Poland losing its taxing rights under a double tax treaty. Any one of these events – even without a change of legal form – is sufficient to generate a taxable event.

The tax base is the unrealised gain. Market value is determined at the date of transfer. Tax cost is the historical acquisition price or depreciated book value, depending on asset type. For intellectual property held under an IP Box regime, the gap between these two figures can be very large after several years of appreciation without disposal.

Corporate taxpayers face a flat 19% rate on the assessed gain. Individual taxpayers face 19% on business assets and a reduced 3% rate on assets with a market value below PLN 4 million, subject to specific conditions. The PLN 4 million threshold applies per taxpayer, not per asset class – meaning a portfolio of assets is aggregated for this test.

Polish tax law exempts certain intra-EU transfers from immediate payment. Where assets move to another European Union or European Economic Area member state, the taxpayer may elect to pay the tax in five annual instalments. This instalment option requires a formal election filed with the Naczelnik Urzędu Skarbowego (Head of the Tax Office) within seven days of the triggering event. Missing that window forfeits the instalment right permanently.

One common misconception concerns mergers and divisions. A cross-border merger where a Polish company merges into a foreign entity is treated as a transfer of all assets. The exit tax charge arises on the entire asset base of the Polish entity at the merger date. This is not deferred by merger relief provisions under corporate restructuring law.

  • Transfer of residency outside Poland
  • Transfer of assets from a Polish permanent establishment abroad
  • Any event causing Poland to lose taxing rights under a treaty
  • Cross-border merger where the Polish entity is absorbed
  • Contribution of assets to a foreign entity without proportionate Polish tax exposure

Which assets and taxpayers fall within the scope?

Exit tax applies to both legal entities and natural persons. For companies, the charge covers all assets held at the moment of departure – fixed assets, receivables, intellectual property, shares in subsidiaries, and rights under long-term contracts. For individuals, the scope is narrower: it covers shares, securities, derivative instruments, and participation rights in collective investment vehicles, provided the taxpayer has been resident in Poland for at least five of the ten years preceding the transfer.

The five-year residency test is an important threshold. An individual who has lived in Poland for fewer than five years in the relevant ten-year window is not subject to exit tax on personal investment assets. However, business assets held through a sole proprietorship or a civil partnership registered with the Centralna Ewidencja i Informacja o Działalności Gospodarczej (Central Register and Information on Economic Activity, CEIDG) are taxed regardless of how long the individual has been resident.

We obtained a favourable ruling for a technology entrepreneur in the Mazowieckie region (spring 2025), confirming that IP rights developed after Polish residency was established were not subject to exit tax on transfer to an Estonian holding structure – because the five-year threshold had not been met at the time of transfer. The saving exceeded PLN 3 million.

Shares in a prosta spółka akcyjna (Simple Joint-Stock Company, PSA) and interests in a spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.) both fall within scope. So do interests held through a family foundation established under Polish law. The family foundation itself, as a legal entity, is subject to exit tax if it transfers assets or residency. Beneficiaries of the foundation are not directly assessed, but the foundation's exit may trigger secondary consequences on distributions.

Transfer pricing rules interact with exit tax in group structures. Where a Polish entity transfers assets to a related party abroad, the Szef Krajowej Administracji Skarbowej (Head of the National Revenue Administration, KAS) may challenge the market value used to compute the exit tax base. Using an internal valuation without independent support exposes the taxpayer to a reassessment plus interest.

How can exit tax be reduced or deferred?

Three instruments are available to taxpayers who plan ahead. First, the five-instalment payment option for EU/EEA transfers reduces immediate cash outflow significantly. Second, a step-up election – available in limited circumstances – allows the taxpayer to reset the tax cost of certain assets before triggering the exit event, reducing the gain subject to tax. Third, structuring the transfer as a partial business transfer rather than a full departure can limit the assets caught by the charge.

The instalment option is the most widely used tool. It requires the taxpayer to remain in an EU or EEA jurisdiction throughout the instalment period. If the taxpayer subsequently moves to a non-EU country before all instalments are paid, the remaining balance becomes immediately due. The Urząd Skarbowy (Tax Office) must be notified within 30 days of any such secondary move.

Step-up elections are technically available under Polish personal income tax law for individuals who have recently become Polish tax residents. The election allows market value at the date of Polish residency commencement to be treated as the acquisition cost for exit tax purposes. This is particularly valuable for founders who built significant value before relocating to Poland and who later plan to leave. The election must be made in the first annual return after establishing Polish residency.

Partial business transfers require careful structuring. Polish corporate tax law recognises the transfer of an organised part of a business as a distinct transaction. If only part of the business moves – and the remaining part retains genuine economic substance in Poland – exit tax applies only to the transferred assets. However, the Naczelnik Urzędu Skarbowego scrutinises these structures closely. Substance requirements must be met in Poland: at least a functioning management presence, decision-making authority, and local employees.

For advisers working on transfer pricing documentation, note that the valuation used for exit tax must be consistent with the arm's length price used in the transfer pricing report. Inconsistency between these two figures is a red flag that triggers KAS audit selection. A tax advisor in Warsaw working on both files simultaneously can align the two valuations before submission.

What are the cross-border pitfalls for foreign investors?

Foreign investors entering or exiting Poland face exit tax risk from two directions. On entry, a foreign company that establishes a Polish permanent establishment and then closes it – without formally liquidating a legal entity – may trigger exit tax on assets that were attributed to that establishment. This is a common surprise for groups that use branch structures rather than subsidiaries.

On exit, the interaction between Polish exit tax and the destination country's rules creates double taxation risk. The double tax treaty between Poland and the Netherlands allocates taxing rights over capital gains on shares in property-rich companies to Poland in certain cases. This means a Dutch investor selling a Polish real estate holding company after having moved residency may face both Polish exit tax and Dutch participation exemption complications. The treaty does not fully eliminate this overlap.

We secured a reversal of an exit tax assessment exceeding PLN 4.5 million for a German-owned manufacturing group in Lower Silesia (autumn 2024). The assessment had been raised on the basis that a restructuring transferred taxing rights over machinery and equipment to a German permanent establishment. We demonstrated that the Polish entity retained full economic ownership throughout, and the assessment was withdrawn at the administrative appeal stage.

KSeF Poland implementation adds a further compliance dimension. From 2026, all VAT-registered entities must issue structured invoices through the Krajowy System e-Faktur (National e-Invoice System, KSeF). An entity planning to transfer residency in 2026 or 2027 must ensure that its KSeF onboarding is completed before departure – because the obligation to issue KSeF invoices continues until the date of formal deregistration from Polish VAT. For the KSeF timeline and its interaction with corporate restructurings, see our analysis of KSeF deadlines and timelines.

IP Box regime holders face a specific risk. A company that has been applying the 5% preferential rate on qualifying IP income and then transfers the IP asset abroad will face exit tax on the full appreciated value of that asset – including the value built up during the IP Box period. The preferential rate during the IP Box period does not reduce the exit tax base. This asymmetry surprises many technology companies.

What does the self-assessment checklist look like before a transfer?

Before any cross-border restructuring, the following checklist should be completed at least six months before the intended transfer date. Six months is the minimum. Twelve months is preferable for complex group structures, because valuation, substance review, and instalment elections all require advance preparation.

  • Identify all assets that would be covered by exit tax – including IP, shares, receivables, and long-term contracts
  • Determine the market value of each asset class and obtain independent valuation support
  • Confirm whether the five-year residency test applies to any individual shareholders
  • Assess whether the destination jurisdiction is EU/EEA (instalment option available) or third-country (full payment due)
  • File the instalment election within seven days of the triggering event if applicable

The decision matrix works as follows. For an intra-EU transfer of a company with assets valued above PLN 10 million, the instalment option should be the default election. For an individual transferring investment assets below PLN 4 million to an EU state, the 3% rate with instalment payment is optimal. For a transfer to a non-EU jurisdiction – the UAE, Switzerland, or the United Kingdom – full payment is required within the standard corporate or personal income tax filing deadline, with no instalment relief.

Three business scenarios illustrate the range. A Mazowieckie-based manufacturing company transferring its registered office to Germany should value all fixed assets and IP at least 12 months before departure and elect instalments on filing. A Warsaw IT company moving its holding structure to Estonia should assess whether the IP rights qualify for a partial business transfer carve-out. A foreign investor winding down a Polish branch (rather than a subsidiary) should confirm whether any assets were attributed to the branch and whether their transfer to the head office constitutes an exit event.

Transfer pricing documentation must be updated to reflect the exit valuation. The Polish tax law requires that this documentation be submitted with the annual return for the year in which the exit event occurs. Late submission carries a penalty of up to PLN 720 per day. The documentation must cover the method used, the comparables selected, and the outcome of the arm's length test.

One final point on family foundations: a Polish family foundation that transfers assets to a foreign beneficiary or converts into a foreign structure is not exempt from exit tax. The foundation is treated as a separate taxpayer. Its exit triggers a charge at the foundation level. Any subsequent distribution to beneficiaries may then attract personal income tax in the destination jurisdiction. Double taxation relief at the beneficiary level depends entirely on the treaty between Poland and the destination country – and many treaties do not cover foundation distributions explicitly.

Specific situations require tailored analysis. A restructuring that looks straightforward on paper may involve several triggering events, each assessed separately. Failure to identify all of them forfeits the instalment option and exposes the taxpayer to interest at 8% per annum on late-assessed tax.

To receive an expert assessment of your exit tax exposure before committing to a restructuring timeline, contact info@kordeckipartners.com.

Frequently asked questions

Q: Does exit tax apply if I simply open a foreign subsidiary without transferring any assets?

A: No. Establishing a foreign subsidiary does not by itself trigger exit tax. The charge arises only when assets are transferred to that subsidiary, when Poland loses taxing rights over those assets, or when the taxpayer's own residency changes. A Polish company that sets up a Dutch holding company and contributes shares to it will trigger exit tax on those shares at the moment of contribution – not at the moment of incorporation of the Dutch entity. The distinction between incorporation and asset contribution is important to plan around.

Q: How long does the instalment payment period last, and what happens if I miss a payment?

A: Polish tax law allows exit tax to be paid in five equal annual instalments for transfers within the EU or EEA. The first instalment is due by the standard filing deadline for the year of the triggering event. If any instalment is missed, the full remaining balance becomes immediately due, and interest accrues from the original due date of each missed instalment – not from the date of default. The Head of the Tax Office is not required to send a reminder before accelerating the outstanding balance.

Q: Is exit tax the same as the tax on unreported foreign income?

A: No. These are separate obligations under Polish tax law. Exit tax is a charge on unrealised gains at the moment of departure. Tax on unreported foreign income – sometimes called controlled foreign company (CFC) taxation – applies to income earned by foreign entities controlled by Polish residents, regardless of whether any transfer has taken place. A taxpayer may be subject to both simultaneously: exit tax on the appreciated value of CFC shares at departure, and CFC income attribution for prior years if the CFC rules were not properly applied during the period of Polish residency.

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 exit tax planning, cross-border restructuring, and corporate tax compliance. 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.