Poland: Proposal for new corporate income tax regime, the “Estonian solution”

Poland: Proposal for new corporate income tax regime

A proposal for a new corporate income tax regime—referred to as the “Estonian solution” and presented on 17 June 2020—would not require corporate taxpayers that satisfy certain conditions and that have an annual turnover below PLN 50 million (approximately €11 million) to pay income tax until such time that the company’s earnings are distributed.


Related content

Under the Estonian solution for corporate income tax, companies are not required to pay corporate income tax on their earnings if reinvested (and not paid out to shareholders). Thus, tax collection is shifted to the moment in time when the profit are distributed.

In Poland, the proposed regime would apply for corporate taxpayers:

  • That have least three employees and only natural persons as shareholders, who do not participate in the equity of any other entity
  • That have operating activities that account for most of the income

The regime would not be available for individual income taxpayers (i.e., natural persons conducting business activities) or partners of partnerships, or for companies whose shares are held by a separate (foreign or domestic) company.

The regime would provide a new format for tax settlement, available for four years with an option for extension for a further four-year period. The extension could be granted if in the last year of applying the regime, the taxpayer still satisfies the requirements. However, crossing the turnover threshold of PLN 50 million during the settlement period would not preclude the use of the regime.

It is estimated that the regime may be available for about 200,000 companies in Poland.

As proposed, the regime would be effective 1 January 2021.

Read a June 2020 report [PDF 230 KB] prepared by the KPMG member firm in Poland

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal