Market overview

Tax audits in Poland increased by 38% year-on-year in 2016, underlining the Polish Ministry of Finance's announcement at the end of 2015 to intensify TP investigations.

The announced plans were to increase the number of TP audits and analyse profit shift schemes in more depth. In the second quarter of 2016, audits were performed on entities that had paid no commercial tax in recent years, despite substantial surges in income.

The ministry stated that results from the aforementioned procedures may infer the need to reduce the tax base to zero, which signifies that entities with no taxable income could be investigated for tax liability in the future.

"There are problems as there are unclear interpretations of the EU regulations," said Michał Szwed, transfer pricing manager at Crido Taxand. "Transfer pricing is one of the priorities of the Ministry of Finance. The Ministry of Finance said there is a lot of work to be done to improve. They are trying to focus on the biggest companies in the market. The level of scrutiny is much higher than it was before because they are better prepared for tax audits and they are very aggressive."

"Almost every tax audit covers transfer pricing, because the Ministry of Finance has put pressure on auditors to audit every company. There are targets of groups of companies such as multinationals," Szwed continued.

The government revised taxpayer obligations in January 2017, and the documentation that has subsequently been required presents an important change. Taxpayers must now prepare for benchmarking analyses and disclose an increased number of accounts and forms detailing transactions with associated corporations.

"The government will use every opportunity to collect money and convince the court that they are right," said Roman Namysłowski, co-head of Crido Taxand. "The current change to the law means that companies have greater responsibility. The tax authorities are very aggressive. Companies can't can be sure if something is [as] safe as it was a few years ago."

The Polish government also signed country-by-country reporting (CbCR) legislation on March 20 2017.

Corporations whose revenue exceeds €750 million ($884 million) are required to comply with CbCR. The first reporting year is the first fiscal year from January 1 2016. Parent entities must provide identification data of entities within their group, their financial data, information and explanations related to the data must be divulged.

Tax authorities

Ministry of Finance
12 Swietokrzyska St, 00-916 Warsaw
Tel: +48 22 694 55 55
Email: kancelaria@mofnet.gov.pl
Website: www.mf.gov.pl

Tax rates at a glance

(As of July 2017)

Corporate income tax 19%
Capital gains tax 19%
Branch tax 19%
Withholding tax
Dividends 19% (a)(b)
Interest 20% (c)(d)
Royalties 20% (c)(d)
Branch remittance tax 0%
Net operating losses (years)
Carryback 0
Carryforward 5 (e)

  1. This tax is imposed on dividends paid to residents and non-residents.
  2. This rate may be reduced by a tax treaty, or under domestic law, if certain conditions are met.
  3. This rate applies only to interest and royalties paid to non-residents.
  4. The tax rate may be reduced by a tax treaty or under domestic law if certain conditions are met.
  5. No more than 50% of the original loss can be deducted in one year.

Source: EY and Deloitte

Firm contact details

Doradztwo Podatkowe WTS&SAJA Sp. z o.o.