Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

July 28, 2021

Poland plans to simplify requirements for corporate income tax consolidation regime

Executive summary

The Polish Ministry of Finance is working on amendments to the corporate income tax (CIT) regime for public consultation. The draft bill, among others, facilitates the creation and operation of the CIT consolidation regime in Poland, referred to as the "Tax Capital Group" (TCG).

The proposed amendments provide for simplified requirements for CIT consolidation (TCG) i.e., no minimum profitability, lower average share capital threshold, possibility to carry forward tax losses, permitted shareholding relations between tax group members other than between a dominant entity and a member.

Detailed discussion

Key provisions of the draft bill are summarized below.

No minimum profitability

The draft bill proposes terminating the permanent examination of the condition of TCG profitability. The current assumption that the share of income in revenues should be at least 2% in the TCG was certainly one of the elements discouraging tax consolidation in the past. According to the proposed regulations entities will be able to generate losses while operating in the TCG and it will not automatically result in the loss of TCG tax status (as it is under the current CIT regulations).

Lower share capital threshold

The minimum average share capital of the company forming the TCG would be reduced to PLN250,000 from the current threshold of PLN500,000.

Possibility to carry forward tax losses

Under certain conditions, the TCG will be allowed to offset income (from a given source of income) with losses incurred by a company forming the TCG (from the same source of income) in the period before formation of the TCG or in the event of the dissolution of the TCG.

Permitted shareholding relations between tax group members other than between a dominant entity and a member

Pursuant to the draft regulations, the existence of capital ties between the companies forming the TCG would be allowed. To date it has not been allowed for entities within the TCG other than the dominant entity, to hold shares in other participants of the TCG. Therefore,  a TCG currently could not be formed between a parent, subsidiary and a subsidiary of the subsidiary.

Possibility for a group member to demerge

Based on the proposed regulations, without breaking the status of TCG, an entity being a TCG member (but not a dominant entity) is allowed to demerge whereby a newly created entity becomes a new member of TCG.

Next steps 

The possibility for Polish entities to consolidate for tax purposes was reduced when limited partnerships became taxpayers as of, as a rule, at the beginning of 2021. The draft regulations, when implemented, may significantly expand the use of tax consolidation through a TCG.

Before the new regulations enter into force, taxpayers should use this time period to check whether this form of taxation would be preferred from a group level, especially for a business which generates tax losses as part of its business lifecycle.


For additional information with respect to this Alert, please contact the following:

EY Doradztwo Podatkowe Krupa sp.k., Warsaw

EY Doradztwo Podatkowe Krupa sp.k., Wroclaw

Ernst & Young LLP (United States), Polish Tax Desk, New York


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more