Investor Taxation Basics in Poland for foreign investors
Poland's tax system for investors is characterized by a distinction between operational business income and capital gains. For foreign nationals, the tax liability depends on their tax residency status and the legal structure used for investment. As of 2026, Poland maintains a competitive corporate tax rate for small businesses and offers specific incentives for reinvestment, such as the "Estonian CIT" model.
Tax Residency and Liability
Before calculating specific taxes, an investor must determine their tax residency status in Poland. This status dictates whether they are taxed on their global income or only on income generated within Poland.
| Status | Criteria | Tax Scope |
|---|---|---|
| Tax Resident | Physical presence >183 days/year OR center of vital interests (personal/economic) in Poland. | Unlimited (Worldwide Income) |
| Non-Resident | Does not meet residence criteria. | Limited (Polish Source Only) |
Non-residents are typically subject to Withholding Tax (WHT) on passive income such as dividends and interest earned in Poland.
Corporate Income Tax (CIT)
For investors operating through a limited liability company (Spółka z o.o.), the profit generated by the entity is subject to Corporate Income Tax. Poland applies a two-tier rate system to support smaller enterprises.
- 9% Reduced Rate: Applies to "Small Taxpayers" whose gross revenue did not exceed €2,000,000 (approx. $2,200,000 USD) in the previous tax year. This rate applies only to operational income, not capital gains.
- 19% Standard Rate: Applies to all companies exceeding the revenue threshold and to all income derived from capital gains (e.g., selling shares or assets).
Dividends and Capital Gains
Profits distributed to shareholders and gains from selling financial assets are treated separately from general operational income. These are classified as "money capitals" and are taxed at a flat rate.
Dividend Tax
Dividends paid by a Polish company to a shareholder are subject to a flat 19% Withholding Tax.
Exemptions: Under the EU Parent-Subsidiary Directive, dividends paid to a parent company located in the EU/EEA/Switzerland may be exempt (0%) if the parent company holds at least 10% of shares for a continuous period of 2 years.
Capital Gains Tax (Belka Tax)
Income from the sale of securities (shares, bonds) is subject to a flat 19% Personal Income Tax. This is often referred to as the "Belka Tax." Losses from capital sources can generally be offset against capital gains in the following five tax years, but cannot be offset against operational business income.
The "Estonian CIT" Model
Poland offers an alternative taxation model known as Ryczałt od dochodów spółek (Estonian CIT). Under this system, the company pays no monthly CIT as long as profits are retained and reinvested in the company. Tax is due only when profit is distributed (e.g., as dividends).
Effective Tax Burden (Company + Shareholder)
When profit is finally distributed, the system offers a lower effective tax rate compared to the classic double-taxation model (CIT + Dividend Tax).
- Small Taxpayers: Approx. 20% total effective tax (combined).
- Larger Entities: Approx. 25% total effective tax (combined).
To qualify in 2026, the company must employ at least 3 people (under employment or civil law contracts) and hold simple ownership structures (shareholders must be natural persons).
Transaction Taxes (PCC and VAT)
Investors should be aware of transaction taxes that apply at the moment of investment or company formation.
- Tax on Civil Law Transactions (PCC):
- 0.5% of the share capital value upon company formation.
- 1.0% on the purchase of shares in an existing Polish company.
- VAT (Value Added Tax): The standard rate is 23%. Investment services and B2B transactions are generally subject to VAT, which is recoverable for registered active VAT payers.
2026 Updates: KSeF Mandatory E-Invoicing
A major change affecting B2B investors in 2026 is the rollout of the National e-Invoicing System (KSeF). From April 1, 2026, all active VAT payers in Poland will be required to issue invoices exclusively through the government's central digital platform. Traditional PDF invoices sent via email will no longer be legally valid for B2B tax settlements.
Double Taxation Treaties
Poland has signed Double Taxation Treaties (DTT) with over 80 countries, including the USA, UK, Canada, and Australia. These treaties often reduce the withholding tax rate on dividends and interest for non-residents (e.g., from 19% to 5% or 15%). To benefit from these reduced rates, the foreign investor must provide a valid Certificate of Tax Residence to the Polish payer.