Executive summary

On 21 August 2026, draft legislation was published implementing the Polish Government's proposal to increase the applicable Corporate Income Tax (CIT) rate from 19% to 22% for two categories: (1) taxpayers and tax capital groups meeting the €50m revenue test; and (2) taxpayers that are constituent entities of domestic or multinational enterprise (MNE) groups within the meaning of the Polish Pillar Two legislation. A tax capital group is a specific Polish regime under which eligible related Polish companies are treated as a single CIT taxpayer.

Under the first criterion, the 22% rate would apply to taxpayers and tax capital groups whose revenue in the immediately preceding tax year exceeded the equivalent of €50m. The threshold would be converted into Polish zloty using the average euro exchange rate published by the National Bank of Poland on the last business day of the tax year in which the revenue was earned.

Under the second criterion, the 22% rate would apply to taxpayers that are constituent entities of domestic or MNE groups within the meaning of the Polish Pillar Two legislation, in a tax year in which the legislation applies to them.

The draft includes transitional rules for taxpayers whose tax year does not correspond to the calendar year. It also provides for a 15.8% increase in simplified CIT advances for taxpayers subject to the €50m revenue test if those advances are calculated by reference to tax due for a year in which the 19% rate applied. The proposal is intended to enter into force on 1 January 2027, although it may still change during the legislative process.

Key elements of the draft legislation

Based on the draft legislation, the key elements of the proposal are as follows:

• A 22% CIT rate would apply for taxpayers and tax capital groups with revenue in the immediately preceding tax year exceeding the equivalent of €50m.
• The threshold would be converted into Polish zloty using the average euro exchange rate published by the National Bank of Poland on the last business day of the tax year in which the revenue was earned.
• The 22% rate would also apply to taxpayers that are constituent entities of domestic or MNE groups within the meaning of the Polish Pillar Two legislation.
• Taxpayers and tax capital groups subject to the €50m revenue test that use simplified CIT advances would generally be required to increase those advances by 15.8% if they are based on tax due for a year in which the 19% rate applied. A specific exception would apply to certain tax capital groups subject to the special banking-sector rules.

The proposed increase from 19% to 22% would raise the nominal CIT rate by three percentage points. In relative terms, this represents an increase of approximately 15.8% compared with the current 19% rate. The draft uses the same percentage to adjust simplified CIT advances for taxpayers and tax capital groups subject to the €50m revenue test.

Key focus areas for businesses

Tax incentives and effective tax rate

Special Economic Zone exemptions, research and development relief, the Intellectual Property (IP) Box and other available tax incentives may become increasingly important if the applicable CIT rate increases to 22%. A higher CIT rate would increase the value of incentives that reduce the taxable base or tax due. However, businesses should assess separately how each incentive would affect their cash tax position and Pillar Two calculations.

The draft has two distinct Pillar Two implications. First, it would extend the 22% CIT rate to taxpayers that are constituent entities of domestic or MNE groups within the meaning of the Polish Pillar Two legislation, for a tax year in which that legislation applies to them. Accordingly, the proposed rate may apply even if a Polish entity does not exceed the standalone €50m revenue threshold. Second, the higher statutory CIT rate would generally be expected to increase the Polish jurisdictional Global Anti-Base Erosion (GloBE) effective tax rate. The actual effect would depend on the group's GloBE income or loss, adjusted covered taxes, deferred tax attributes, available incentives and other GloBE adjustments.

Transfer pricing and the revenue threshold

The draft specifies the basic design of the €50m revenue threshold. It refers to revenue earned in the tax year immediately preceding the relevant tax year. The euro amount would be converted into Polish zloty using the average euro exchange rate published by the National Bank of Poland on the last business day of the tax year in which the revenue was earned.

Transfer pricing arrangements, year-end adjustments and other variable revenue items may affect the amount or timing of revenue recognized by a Polish taxpayer. The draft does not expressly address the extent to which such items should be taken into account for the proposed €50m threshold. Their treatment may therefore require further analysis or clarification during the legislative process. Although the threshold is revenue-based, deductible costs will remain relevant to the taxable base and the resulting CIT liability.

Transactions and reorganizations

Taxpayers undertaking material transactions or reorganizations should consider whether the proposed rules could affect which entity recognizes revenue, the period relevant for the revenue threshold and the applicable CIT rate. These issues may arise in particular in mergers, demergers, asset transfers, acquisitions, disposals and transactions implemented over more than one tax year. As the draft does not expressly address all such scenarios, their treatment may require further analysis or clarification during the legislative process. For taxpayers with non-calendar tax years, the draft provides that if the tax year started before 1 January 2027 and ends after 31 December 2026, the existing CIT rules would continue to apply until the end of that tax year.

Actions to consider

At this stage, businesses may want to consider the following actions, depending on their particular circumstances:

• Monitor the legislative process and any changes to the draft provisions.
• Identify Polish taxpayers and tax capital groups that may exceed the €50m revenue threshold in the immediately preceding tax year.
• Map Polish entities that are constituent entities of domestic or MNE groups within the meaning of the Polish Pillar Two legislation.
• Model the potential impact of a 22% CIT rate compared with the current 19% rate, including the effect on simplified CIT advances for taxpayers and tax capital groups subject to the €50m revenue test.
• Assess separately the impact of deductible costs on the taxable base and resulting CIT liability.
• Assess the interaction with tax incentives and Pillar Two.
• Identify material transactions and reorganizations that may require review in light of the draft rules.
• Revisit the analysis once the draft moves through consultations and further stages of the legislative process.