Author: kancelaria

Forms of Business Activity in Poland (2025)

Posted on by kancelaria

Choosing the right legal form for conducting business in Poland is one of the most crucial decisions that will impact your legal liability, tax burden, and formal requirements. Foreign entrepreneurs have several options available – from the simplest solutions to more complex corporate structures.

Sole Proprietorship (Jednoosobowa Działalność Gospodarcza)

The simplest form of doing business in Poland, suitable for small enterprises and freelancers.

Key Features:

  • Minimal formalities – online registration through CEIDG (Central Register and Information on Business Activity)
  • No required share capital
  • Full personal liability of the entrepreneur with all personal assets
  • Taxation: personal income tax (PIT) – progressive scale 12%/32% or flat tax 19%

Best For: Ideal for individuals running small businesses, consultants, and freelancers. Note: Citizens from outside the EU/EEA/Switzerland may require a residence permit.

Disadvantages:

  • Unlimited personal liability
  • Lower credibility in the eyes of contractors and banks
  • Difficulties in obtaining larger financing

Limited Liability Company (Spółka z o.o. / LLC)

The most popular form for medium and large foreign enterprises in Poland.

Key Features:

  • Minimum share capital: PLN 5,000 (approximately EUR 1,150)
  • Limited liability of shareholders – only up to the amount of contributed capital
  • Requires articles of association prepared by a notary
  • Mandatory management board (minimum one member) and optional supervisory board
  • Taxation: CIT 19% (or 9% for small taxpayers with revenues up to EUR 2 million)

Registration Process:

  1. Preparation of company agreement with a notary
  2. Payment of share capital to a temporary account
  3. Registration in KRS (National Court Register) – 2-4 weeks
  4. Automatic registration for tax and social security (ZUS) purposes

Best For: The best choice for foreign investors planning medium or large-scale operations in Poland. Provides asset protection and is internationally recognized.

Advantages:

  • Limited liability
  • Flexibility in ownership structure
  • Easier sale of shares than in sole proprietorship
  • Greater business credibility

Joint Stock Company (Spółka Akcyjna / S.A.)

A form designed for large enterprises, especially those planning to go public.

Key Features:

  • Minimum share capital: PLN 100,000 (approximately EUR 23,000)
  • Limited liability of shareholders
  • Mandatory bodies: management board, supervisory board, general meeting
  • More complex reporting and corporate requirements
  • Possibility of issuing shares on the public market

Best For: Large corporations, companies planning to raise capital through share issuance, enterprises required by law to adopt this form (e.g., banks).

Disadvantages:

  • High establishment and operational costs
  • Complicated corporate procedures
  • Greater bureaucracy

Branch of a Foreign Company

A foreign company can open a branch in Poland without establishing a separate legal entity.

Key Features:

  • No share capital requirement
  • Branch is not a separate legal entity – liability rests with the parent company
  • Registration in KRS required
  • Requires appointment of a representative (Polish resident or foreigner with residence permit)
  • Taxation: CIT 19% on income generated in Poland

Registration Process:

  • Submission of application to KRS with parent company documents (translated and authenticated)
  • Registration time: 2-4 weeks
  • Cost: approximately PLN 1,000-2,000

Best For: Companies testing the Polish market, conducting temporary projects, or limited-scope activities.

Advantages:

  • Faster and cheaper than establishing a company
  • Maintains single legal structure

Disadvantages:

  • No separation of liability from parent company
  • Full accounting and tax requirements as for Polish company
  • May be less tax-attractive than an LLC

Representative Office

A form allowing auxiliary activities without generating revenue in Poland.

Key Features:

  • Cannot conduct commercial activities in Poland
  • Permitted activities: marketing, market research, parent company representation
  • Requires permit from the minister responsible for economy
  • Does not pay CIT in Poland (no commercial activity)

Best For: Companies wanting to promote their brand in Poland, conduct market research, or prepare for full business presence.

Restrictions:

  • Prohibition on concluding contracts on behalf of parent company
  • Cannot issue invoices
  • Strict controls – activities must be genuinely non-commercial

Limited Partnership and Limited Joint-Stock Partnership

Hybrid forms combining elements of partnerships and capital companies.

Limited Partnership (Spółka Komandytowa):

  • Minimum two partners: general partner (full liability) and limited partner (liability limited to contribution)
  • No minimum share capital
  • Taxation: CIT 19% (since 2021) or optionally tax transparency

Best For: Popular in holding structures, enables tax optimization while maintaining flexibility.

Comparison – Decision Table

Criterion Sole Proprietorship LLC JSC Branch Representative Office
Min. Capital 0 PLN 5,000 PLN 100,000 0 0
Liability Unlimited Limited Limited Parent Company Parent Company
Registration Time 1 day 2-4 weeks 4-6 weeks 2-4 weeks 2-3 months
Commercial Activity Yes Yes Yes Yes No
Administrative Complexity Low Medium High Medium Low

Practical Recommendations

For small businesses and freelancers (turnover < EUR 100,000/year): Consider sole proprietorship – minimal costs and formalities.

For medium enterprises and most foreign investors: LLC is the gold standard – provides protection, flexibility, and is well understood by banks and contractors.

For large corporations or IPO plans: Joint stock company, though more expensive, offers the greatest opportunities for raising capital.

For market testing: A branch can be a good temporary solution, but remember the lack of liability separation.

For non-commercial activities: Representative office is the only option, but requires strict adherence to the prohibition on commercial activities.

Tax Considerations – Key Points

Regardless of the chosen form, remember:

  • VAT: Mandatory registration when turnover exceeds PLN 200,000/year
  • Transfer Pricing: Documentation required for transactions with related entities
  • Permanent Establishment: Branch automatically creates tax permanent establishment in Poland
  • WHT (Withholding Tax): Tax on foreign payments (dividends, interest, royalties)

Summary

The choice of legal form should consider the scale of planned operations, ownership structure, capital needs, and long-term strategy. For most foreign investors, an LLC remains the optimal solution due to the balance between costs, legal protection, and operational flexibility.

Before making a decision, it’s worth consulting with a Polish legal and tax advisor who will help tailor the structure to individual needs and optimize tax burdens in accordance with applicable regulations.

Additional Considerations for Foreign Investors

EU/EEA Citizens: Can establish businesses in Poland on the same terms as Polish citizens, with access to all forms of business activity.

Non-EU/EEA Citizens: May face certain restrictions. While they can establish LLCs and joint stock companies, some business forms and sectors may require additional permits or have special requirements.

Banking Requirements: Opening a business bank account in Poland typically requires:

  • Company registration documents
  • Tax identification number (NIP)
  • Identification documents of authorized persons
  • Proof of business address

Common Pitfalls to Avoid:

  1. Underestimating ongoing costs (especially ZUS social security contributions for sole proprietors)
  2. Choosing the wrong tax system
  3. Insufficient capital for LLC operations
  4. Not understanding reporting obligations
  5. Ignoring transfer pricing documentation requirements

Timeline for Business Setup:

  • Sole Proprietorship: 1-3 days
  • LLC (traditional): 3-6 weeks
  • LLC (online S24 system): 1-2 weeks
  • Branch: 3-5 weeks
  • Representative Office: 2-4 months

The Polish business environment continues to evolve, with ongoing digitalization of administrative processes making it increasingly easier for foreign investors to establish and operate businesses. However, professional legal and accounting support remains crucial for navigating the regulatory landscape successfully.

Poland Tax Guide for Foreign Investors 2025

Posted on by kancelaria

Poland has established itself as one of the most attractive investment destinations in Central Europe, offering a competitive tax system, strategic location, and access to the European Union market. Understanding the Polish tax framework is essential for foreign investors looking to maximize their investment returns while maintaining full compliance with local regulations.

This guide provides an overview of the key tax considerations for foreign investors operating in Poland, covering corporate taxation, personal income tax, value-added tax, and available incentives.

Corporate Income Tax (CIT)

Standard Tax Rates

Poland operates a territorial tax system where companies are taxed on their worldwide income if they are Polish tax residents. The standard corporate income tax rates are:

  • 19% standard rate – applicable to most businesses
  • 9% reduced rate – for small taxpayers with revenues not exceeding EUR 2 million equivalent
  • 5% preferential rate – for qualifying income from intellectual property rights under the IP Box regime

Tax Residency

A company is considered a Polish tax resident if it has its registered office or place of management in Poland. Tax residents are subject to CIT on their worldwide income, while non-residents are taxed only on Polish-source income.

Deductible Expenses

Business expenses that are incurred for the purpose of generating revenue or preserving or securing revenue sources are generally tax-deductible. However, certain limitations apply to:

  • Interest expenses (thin capitalization rules and earnings stripping rules)
  • Entertainment and representation expenses
  • Depreciation of certain assets
  • Transactions with related parties in tax havens

Personal Income Tax (PIT)

Tax Rates for Residents

Polish tax residents are subject to progressive personal income tax rates on their worldwide income. The current PIT structure includes:

Annual Income Tax Rate
Up to PLN 120,000 (~EUR 27,500) 12%
Above PLN 120,000 32%

Additionally, a solidarity tax of 4% applies to income exceeding PLN 1,000,000 (approximately EUR 230,000).

Tax Residency for Individuals

An individual is considered a Polish tax resident if they:

  • Have their center of personal or economic interests in Poland, or
  • Stay in Poland for more than 183 days in a tax year

Taxation of Foreign Employees

Foreign nationals working in Poland may benefit from:

  • Tax relief for expatriates – allowing flat-rate taxation of 20% for qualifying foreign specialists
  • Double taxation treaties – Poland has signed tax treaties with over 80 countries to avoid double taxation
  • Social security exemptions – for employees covered by social security in their home countries under EU regulations or bilateral agreements

Value Added Tax (VAT)

VAT Rates

Poland applies EU-harmonized VAT rules with the following rates:

Rate Percentage Applies To
Standard 23% Most goods and services
Reduced 8% Selected food products, restaurant services
Super-reduced 5% Basic food items, books, newspapers
Zero-rated 0% Intra-EU supplies, exports

VAT registration is mandatory for entities whose taxable turnover exceeds PLN 200,000 (approximately EUR 46,000) in any given year. Foreign entities providing services in Poland may also have VAT registration obligations.

VAT Refunds for Foreign Businesses

Foreign businesses not established in Poland but incurring Polish VAT on purchases can apply for VAT refunds through electronic procedures, provided they are registered for VAT purposes in their home country.

Withholding Tax

Poland imposes withholding tax on certain types of income paid to non-residents, including:

Type of Income Standard Rate
Dividends 19%
Interest 20%
Royalties 20%
Services (management, consulting, etc.) 20%

These rates may be reduced under applicable double taxation treaties. To benefit from treaty rates, proper documentation must be provided, including a certificate of tax residency from the recipient’s country.

Transfer Pricing

Poland has comprehensive transfer pricing regulations aligned with OECD guidelines. Key requirements include:

  • Transfer pricing documentation – mandatory for transactions with related parties exceeding specified thresholds
  • Country-by-Country Reporting (CbCR) – for multinational groups with consolidated revenue exceeding EUR 750 million
  • Advance Pricing Agreements (APAs) – available to provide certainty on transfer pricing methodologies
  • Arm’s length principle – all related-party transactions must be conducted at market terms

Tax Incentives and Special Economic Zones

Special Economic Zones (SEZ)

Poland offers attractive investment incentives through Special Economic Zones and the Polish Investment Zone. Benefits include:

  • CIT exemptions up to 70% of eligible investment costs (depending on region and company size)
  • No time limits on the duration of the exemption
  • Available for both new investments and expansion projects

R&D Tax Relief

Companies conducting research and development activities can benefit from:

  • Enhanced tax deductions – up to 200% deduction for qualifying R&D costs
  • IP Box regime – preferential 5% CIT rate on income from qualified intellectual property

Investment Incentives

Additional support mechanisms include:

  • Cash grants for job creation and investment
  • Exemption from real estate tax in certain zones
  • Accelerated depreciation for certain assets

Tax Compliance and Reporting

Filing Requirements

Key compliance obligations include:

  • Corporate income tax returns – annual filing deadline of the end of the third month following the fiscal year-end
  • Monthly advance CIT payments – based on actual income or using simplified methods
  • VAT returns – monthly or quarterly depending on turnover
  • SAF-T reporting – structured accounting files submitted monthly via JPK system
  • Transfer pricing documentation – prepared annually and provided upon request

Digital Tax Administration

Poland has implemented advanced digital tax reporting systems:

  • JPK (Jednolity Plik Kontrolny) – mandatory structured electronic reporting of accounting records and invoices
  • KSeF (National e-Invoice System) – electronic invoicing system being rolled out across Poland
  • Online tax account – electronic platform for tax settlements and communication with authorities

Anti-Avoidance Rules

Poland has implemented several measures to combat tax avoidance, aligned with EU directives and BEPS recommendations:

  • General Anti-Abuse Rule (GAAR) – empowers tax authorities to disregard artificial arrangements designed primarily for tax benefits
  • Controlled Foreign Company (CFC) rules – taxation of certain passive income of foreign subsidiaries
  • Exit taxation – taxation of unrealized gains when assets or tax residence are transferred abroad
  • Mandatory disclosure rules (MDR) – requirement to report potentially aggressive tax arrangements
  • Interest limitation rules – restricting deductibility of borrowing costs exceeding 30% of tax EBITDA

Other Relevant Taxes

Real Estate Tax

Real estate tax is levied by local municipalities on land, buildings, and structures. Rates vary by location and property type but are generally competitive compared to Western European standards.

Stamp Duty

Stamp duty applies to certain civil law transactions not subject to VAT, such as some loan agreements and share sale agreements. The standard rate is 0.5% to 2% depending on the transaction type.

Excise Tax

Excise tax applies to specific goods including alcoholic beverages, tobacco products, energy products, and electricity. Rates are harmonized with EU requirements.

Digital Services Tax

Poland has not yet implemented a standalone digital services tax but monitors EU-level developments in this area.

Practical Considerations for Foreign Investors

Tax Planning Strategies

Effective tax planning for foreign investors in Poland should consider:

  • Optimal corporate structure and holding company location
  • Utilization of double taxation treaties
  • Available tax incentives and special economic zones
  • Transfer pricing documentation and compliance
  • VAT optimization and recovery procedures

Tax Rulings and Advance Agreements

Foreign investors can obtain certainty on tax treatment through:

  • Tax interpretations – binding rulings on the application of tax law to specific situations
  • Advance Pricing Agreements – confirmation of transfer pricing methodologies
  • Tax capacity opinions – confirmation of tax residency status

Professional Support

Given the complexity of Polish tax regulations and frequent legislative changes, foreign investors are strongly advised to engage lawyers and tax advisors with expertise in Polish taxation and international tax planning.

Conclusion

Poland offers a competitive and increasingly investor-friendly tax environment within the European Union. With standard CIT rates, attractive special economic zones, generous R&D incentives, and a growing network of double taxation treaties, Poland provides numerous opportunities for tax-efficient investment structuring.

However, the Polish tax system is complex and subject to frequent changes. Foreign investors must maintain robust compliance procedures, including digital reporting requirements, transfer pricing documentation, and anti-avoidance rule considerations. Proper tax planning from the outset, supported by experienced tax professionals, is essential to maximize benefits while ensuring full compliance with Polish tax law.

As Poland continues to strengthen its position as a Central European investment hub, staying informed about tax developments and maintaining proactive tax management will be key to successful long-term operations in the Polish market.

Expert Law and Tax Advisory for Foreign Investors

Navigating Poland’s tax system requires specialized knowledge and experience. Our law firm provides comprehensive law and tax advisory services tailored specifically for foreign investors operating in Poland.

Our Services

We specialize in supporting international businesses at every stage of their Polish operations:

  • Tax structuring and optimization – designing efficient corporate structures for market entry
  • Investment incentives advisory – securing Special Economic Zone benefits and R&D tax reliefs
  • Transfer pricing documentation – preparation and compliance with Polish and OECD requirements
  • VAT and withholding tax compliance – registration, reporting, and refund procedures
  • Tax rulings and APAs – obtaining binding tax interpretations and advance pricing agreements
  • Ongoing tax compliance – CIT returns, digital reporting (JPK), and communication with tax authorities
  • Tax dispute resolution – representation in audits, appeals, and litigation

Why Choose Us?

Our team combines deep knowledge of Polish tax and company law with international expertise:

  • Extensive experience with foreign investors from Europe, North America, and Asia
  • Multilingual team fluent in English, German, and Polish
  • Proven track record in securing tax incentives and optimizing tax positions
  • Up-to-date expertise on the latest regulatory changes and digital reporting requirements
  • Practical, business-oriented approach focused on your commercial objectives

Contact us today to discuss how we can support your Polish investment

 

How to Set Up a Company in Poland as a Foreigner: Step-by-Step Guide (2025)

Posted on by kancelaria

Starting a company in a new country can seem complicated — but Poland makes it surprisingly straightforward for foreign investors. Whether you’re an entrepreneur, a growing startup, or a corporate group, this step-by-step guide will walk you through the full process of company registration in Poland in 2025

1. Why Foreigners Choose Poland to Start a Business

Poland has become a European leader in business openness.
Foreigners can own 100% of a Polish company, manage it remotely, and benefit from full access to the EU single market.

Beyond its legal flexibility, Poland offers:
• A stable economy and strong banking system,
• Skilled workforce fluent in English and other European languages,
• Favorable tax incentives (e.g., IP Box, R&D relief), and
• Strategic location between Western and Eastern Europe.

💡 Foreign investors from the EU, UK, USA, and Asia are increasingly choosing Poland for its combination of cost efficiency and legal transparency.

2. Choose the Right Legal Form

The most common type of company for foreign investors is the Limited Liability Company (spółka z ograniczoną odpowiedzialnością – sp. z o.o.).

✅ Advantages of a Sp. z o.o.:
• Can be founded by a single shareholder (individual or legal entity)
• Limited personal liability for owners
• Flexible structure for management and profit distribution
• Low share capital requirement: minimum PLN 5,000 (~€1,200)

Other forms include:
• Joint-Stock Company (S.A.) – for large-scale operations or public listings,
• Branch Office – extension of a foreign parent company,
• Representative Office – for marketing and research (no trading).

3. Step-by-Step Company Registration Process

Below is a clear roadmap to register your company in Poland in 2025:

Step 1: Prepare the Articles of Association

This document defines your company’s structure, share capital, and management rules.
It must be signed electronically (eKRS system) or before a Polish notary.

Step 2: Register in the National Court Register (KRS)

All companies must register with the Krajowy Rejestr Sądowy (KRS).
You’ll need to provide:
• Company name and address
• Shareholder and management data
• Articles of Association
• Proof of share capital payment

👉 Timeframe: usually 1–2 weeks for online registration.

Step 3: Obtain Your Tax Numbers (NIP and REGON)

After KRS approval, your company automatically receives:
• NIP – Tax Identification Number
• REGON – Statistical Number for business activity

If you plan to sell goods or services, you’ll also need VAT registration (optional but often recommended).

Step 4: Open a Corporate Bank Account

You’ll need a Polish business bank account to deposit share capital and manage transactions.
Most banks allow English-language service and offer digital onboarding for foreign directors.

Step 5: Register for Social Security (ZUS)

If you plan to employ staff or pay board members, register with the ZUS (Social Insurance Institution) for payroll contributions.

Step 6: Keep Proper Accounting and Compliance

Polish companies must maintain accounting books and file annual financial statements.
Outsourcing bookkeeping to a local accounting office or legal partner is often the most efficient choice.

4. Can You Register a Company Remotely?

As of 2025, foreigners can establish a Polish company fully online, using a trusted profile (Profil Zaufany) or qualified electronic signature.

You can manage the process remotely with help from a local proxy or legal representative, including document signing, VAT registration, and bank setup.

6. Tax and Compliance Basics

Once registered, your company becomes a Polish tax resident, meaning it must pay taxes on Polish income (and potentially global income, depending on structure).

Main taxes:
• Corporate Income Tax (CIT): 19% standard, 9% for small taxpayers
• Value Added Tax (VAT): 23% standard, reduced rates 8%, 5%
• Dividend Tax: 19%, but often reduced under Double Taxation Treaties

To optimize your structure, consult a tax advisor experienced in foreign entities — many reliefs and deductions are available for new investors.

7. Common Mistakes to Avoid
• Using an incomplete Articles of Association template (can delay registration)
• Forgetting VAT or ZUS registration after setup
• Choosing the wrong PKD code (business activity type)
• Opening a personal, not corporate bank account for operations

✅ A professional legal or accounting partner can help ensure your company is fully compliant from day one.

8. Summary

Setting up a company in Poland as a foreigner is easier than ever in 2025.
With online registration, transparent tax rules, and EU market access, it’s a strong foundation for any international business expansion.

Whether you plan to open a tech startup, manufacturing branch, or consulting firm — Poland offers the right mix of security, affordability, and growth potential.

📞 Need Legal Assistance in Setting Up Your Polish Company?

From drafting the Articles of Association to opening your bank account — we guide foreign investors through every step of company formation in Poland.
👉 Need help starting your business in Poland? Contact our legal & tax experts today.

Why Poland is the New Investment Hotspot in Europe (2025 Edition)?

Posted on by kancelaria

Poland has quietly evolved into one of Europe’s most dynamic business destinations. With strong economic fundamentals, a skilled workforce, and strategic access to the EU market, 2025 is shaping up to be the year global investors double down on Poland. Here’s why.

A Stable Economy in an Uncertain Europe

While many European economies are still recovering from post-pandemic slowdowns and inflationary pressure, Poland stands out as a model of stability.

According to forecasts from the European Commission, Poland’s GDP growth remains among the highest in the EU, fueled by strong domestic demand, digital innovation, and record levels of foreign direct investment (FDI).

The country’s low public debt, resilient banking sector, and steady currency (PLN) provide confidence to investors seeking predictability in a volatile European landscape.

Strategic Location at the Heart of Europe

Poland’s geographical position has always been one of its greatest strengths. Sitting between Western and Eastern Europe, it serves as a logistics and manufacturing hub for companies targeting both EU and non-EU markets.

With modern infrastructure, including highways, airports, and logistics parks, Poland offers smooth connectivity to Berlin, Prague, and the Baltic ports. It’s no surprise that major global players like Amazon, LG, and Intel have expanded their operations here.

Competitive Labor Costs and Skilled Workforce

Poland’s workforce combines high productivity and strong technical education with still-competitive labor costs compared to Western Europe.

Over 40% of young adults hold university degrees, with many specializing in STEM fields (engineering, IT, and finance).

For investors in IT outsourcing, R&D, fintech, and manufacturing, this balance of quality and cost makes Poland one of the most attractive hiring destinations in the EU.

A Thriving Technology and Innovation Scene

In recent years, Poland has become Central Europe’s tech powerhouse.

Cities like Warsaw, Kraków, and Wrocław host vibrant startup ecosystems, attracting both venture capital and corporate investors.

Government programs such as “Polish Investment Zone” and R&D tax incentives encourage innovation, while tech clusters in AI, gaming, cybersecurity, and renewable energy continue to expand.

💡 Poland now ranks among Europe’s top five countries for IT talent availability — a key factor driving long-term digital investment.

Business-Friendly Environment and EU Access

Poland’s EU membership provides full access to the single market of over 440 million consumers, while maintaining competitive tax incentives for foreign businesses.

The corporate income tax (CIT) rate remains moderate, and companies benefit from reliefs like the IP Box (5% rate) and research & development deductions.

Poland has also simplified company registration procedures, allowing foreigners to establish a business fully online through the national eKRS system.

Rising Sectors: Green Energy, Logistics, and Real Estate

Investors looking ahead to 2025 will find particularly strong momentum in:

  • Renewable energy and green tech – driven by EU decarbonization targets and local investment grants.

  • Logistics and warehousing – fueled by nearshoring trends and e-commerce growth.

  • Commercial and residential real estate – stable yields and growing demand in major Polish cities.

These industries represent long-term growth opportunities supported by both government policy and private sector innovation.

Government Incentives for Foreign Investors

The Polish Investment Zone (PIZ) offers income tax exemptions for companies starting or expanding operations in designated regions.

In addition, programs like R&D relief, grants for high-tech projects, and EU structural funds make Poland highly competitive in attracting foreign capital.

For investors prioritizing sustainable, scalable growth — Poland offers both financial and operational advantages unmatched in the region.

Poland’s Momentum in 2025: What’s Next?

Poland’s business climate has matured — it’s no longer an “emerging” market, but a modern EU economy offering reliability, profitability, and innovation.

With an expanding middle class, improving infrastructure, and forward-looking government policies, the country is well-positioned to remain Europe’s investment hotspot for years to come.

Need Help Entering the Polish Market?

Setting up a company, managing taxes, or navigating Polish regulations doesn’t have to be complicated.

👉 Need legal or tax assistance for your investment in Poland? Contact our team today— we help foreign investors establish and grow their business with full compliance and confidence.

New Guidance on Directors’ Personal Liability for Corporate Tax Debts in Poland

Posted on by kancelaria

CJEU Judgments on the Liability of Company Directors

In 2025, the Court of Justice of the European Union (CJEU) delivered two judgments in cases C-277/24 (Adjak) and C-278/24 (Genzyński) concerning the liability of company directors for a company’s tax arrears.

Both rulings strengthened the procedural rights of directors, emphasizing the need for an individual assessment of fault, the right to an effective defense, and the limitation of automatic enforcement of tax liabilities.

Judgment in Case C-277/24 (Adjak)

This judgment was issued in response to a preliminary question from the Voivodeship Administrative Court in Wrocław, which was examining the case of a former company president who had been refused participation in the company’s tax proceedings regarding VAT settlements.

In Poland, members of management boards are jointly and severally liable for a company’s tax obligations incurred during the period they held office.

Such liability arises when tax irregularities are found, enforcement against the company’s assets proves ineffective, and the management board failed to file for bankruptcy within the statutory deadline.

One of the main issues for directors is that, in proceedings concerning joint and several liability, they have no procedural right to challenge the tax authority’s findings made in prior assessment proceedings against the company.

They also cannot participate in those proceedings as parties.

In its judgment, the CJEU held that refusing a person who may potentially be held jointly liable for a company’s tax debt participation in the company’s tax proceedings does not, in itself, breach EU law.

However, a violation of EU principles would occur if the director were denied the opportunity, in subsequent liability proceedings against them, to challenge the factual and legal findings made by the tax authority in the earlier proceedings against the company.

In other words, the CJEU emphasized that a company director must have an effective opportunity to challenge the findings concerning the company’s tax arrears, even if they were not a party to the original tax assessment proceedings.

Judgment in Case C-278/24 (Genzyński)

In the Genzyński case, the CJEU ruled that the national mechanism imposing joint and several liability on current or former company directors for tax debts incurred during their term of office is compatible with EU law.

However, the Court set out several key guidelines that must be observed when applying the national provisions on directors’ liability for corporate tax debts.

  • Fault in failing to file for bankruptcy must be assessed individually; it cannot be presumed automatically from the fact of liability.

  • Liability depends, in particular, on the director (current or former) being able to prove that the bankruptcy petition was filed in due time or that the failure to file was not attributable to their fault, provided that they can demonstrate that they exercised due diligence in managing the company’s affairs.

  • The argument that the State Treasury (tax office) is the company’s only creditor cannot be relied upon as a defense by directors.

The judgment in C-278/24 (Genzyński) affects ongoing proceedings in which directors will now have the possibility to invoke due diligence in managing the company and justify the failure to file for bankruptcy as a valid defense.

This thus provides an additional means of protecting their rights in liability proceedings.

What Do the CJEU Rulings Change?

At this stage, no legislative amendments have been introduced.

However, in response to the CJEU rulings, the Minister of Finance and Economy issued on 29 August 2025 the General Interpretation No. DTS2.8012.5.2025, clarifying how Article 116 of the Polish Tax Ordinance (Ordynacja podatkowa) should be applied.

Under this provision, members of the management board of a capital company are jointly and subsidiarily liable with all their personal assets for the company’s tax arrears incurred during their term of office.

A director can be released from such liability if they:

  • indicate company assets from which enforcement can cover the arrears, or

  • prove that the bankruptcy petition was filed on time, or that the failure to file was not their fault.

The CJEU confirmed that the Polish provisions are consistent with EU law, provided they are interpreted correctly.

The key consequences for company directors are:

  1. Right to challenge the tax authority’s findings regarding the company’s arrears – the director may contest factual and legal findings, though not the company’s own final decision.

  2. Right of access to the company’s case file – limited only to the materials necessary for their defense in liability proceedings.

  3. Right to demonstrate lack of fault in failing to file for bankruptcy – a director may be released from liability if they exercised due diligence and the failure was caused by objective obstacles.

What Does This Mean in Practice for Directors?

The interpretation emphasizes that a director is liable only to the extent that they had actual control over the company’s affairs.

The right of defense does not entail repeating the entire tax proceedings against the company — it concerns only challenging findings directly affecting the director’s liability.

The presumption of a director’s fault in relation to the company’s tax arrears remains strong but rebuttable — it is possible to avoid liability by proving that due diligence was exercised.

For Entrepreneurs and Company Directors, the New Interpretation Means:

  • the need for careful documentation of management decisions and actions within the company,

  • preparedness for potential personal financial liability for the company’s tax arrears,

  • and the ability to actively exercise defense rights and raise objections in liability proceedings.

In practice, the interpretation increases clarity and legal certainty for company directors, outlining how to effectively defend themselves against liability for a company’s tax debts.

New Obligations for Companies Posting Employees to the Netherlands – What Will Change from 2027?

Posted on by kancelaria

Certification Requirement for Employment Agencies and Companies Posting Employees to the Kingdom of the Netherlands

The Dutch labor market is facing one of the most significant changes in the past decade. The upcoming WTTA Act („Wet toelating terbeschikkingstelling van arbeidskrachten”) introduces a mandatory certification requirement for all companies that provide employees to work in the Netherlands. This change applies not only to local and foreign temporary employment agencies but also to any other entities that make workers available on the Dutch labor market (“uitlener” under Dutch labor law).

The law was passed by the House of Representatives in April 2025. It still requires approval by the Senate, with a debate scheduled for October 7, 2025. The law is expected to come into effect on January 1, 2027. From January 1, 2028, agencies and companies seconding employees will be subject to verification regarding possession of the certificate, and cooperation with entities that are not legally authorized to operate in the Netherlands will be penalized.

Under the new regulations, all agencies providing employees will need to hold a valid license in order to legally supply workers to other employers. In practice, operating without such authorization will be illegal, and cooperation with unauthorized companies may result in financial penalties. The purpose of the WTTA Act is to protect workers and ensure that all agencies operate legally and comply with Dutch labor law, tax, and social security regulations. Companies that already hold a SNA certificate (Stichting Normering Arbeid) may benefit from a simplified licensing process, but they are still subject to the obligations under the WTTA Act.

Requirements for Employment Agencies and Companies Posting Employees to the Netherlands

To obtain certification, agencies must demonstrate compliance with specific requirements, including:

  • Possession of a VOG certificate (Verklaring Omtrent het Gedrag) – a certificate of good conduct for the company,

  • Provision of a financial guarantee (approximately €100,000),

  • Compliance with labor law and social security regulations,

  • Proof of proper payment of taxes and contributions.

The primary goal of the WTTA is to protect employees, ensure fair working conditions, and increase transparency in the labor market. The new regulations will enable companies using employees to cooperate only with legal agencies and posting entities, thereby reducing legal and financial risks.

These changes will have a significant impact on the functioning of the labor market in the Netherlands. Therefore, it is important to prepare in advance. Implementation of the WTTA will increase the responsibility of agencies and companies seconding employees, improve worker safety, and provide greater transparency across the sector.

New Labour Inspection Rules in 2026 – Are You Ready?

Posted on by kancelaria

Upcoming Changes in the National Labour Inspectorate – What Awaits Employers and Employees?

With the draft bill amending the Act on the National Labour Inspectorate (PIP) and certain other acts, prepared by the Ministry of Family, Labour and Social Policy, one of the most significant modifications to the employee protection system and labour market oversight in recent years is on the horizon.

The aim of the proposed changes is to strengthen the role of labour inspectors by equipping them with effective tools to respond to violations of the law and to align the mechanisms of the Labour Inspectorate with European standards. According to the government’s plan, the bill is to be adopted by the end of 2025. If so, both employers and employees will soon have to prepare for the upcoming changes.

Administrative Decisions on Employment Relationships

One of the most revolutionary (and controversial) changes is granting PIP inspectors the power to issue administrative decisions confirming the existence of an employment relationship.

This means that if, in the inspector’s view, a civil law contract actually meets the criteria of an employment contract (as defined in Article 22 § 1 of the Labour Code), the inspector may order its conversion into an employment contract without referring the case to a labour court.

Currently, inspectors do not possess such powers – they may only submit motions to the labour court, which rules on these cases in judicial proceedings. To protect workers from long-lasting litigation, such a reform has been planned.

An inspector’s decision will take effect from the date of issuance, granting the individual full employee status. Employers will then be obliged to pay wages under an employment contract, maintain personnel files, grant leave, and provide sick pay. Importantly, the decision may also set retroactive dates of employment, potentially obliging employers to pay employee benefits retrospectively.

Only the tax and social security consequences of periods prior to the decision will be suspended until the appeal period expires or a final court ruling is issued. Appeals against the inspector’s decision must be filed within seven days to the Chief Labour Inspector, and then within a further seven days to the local labour court.

Remote Inspections and Digitalisation

The reform introduces the possibility of remote inspections, allowing PIP to conduct procedures online. This includes workplace inspections, live video interviews with witnesses, and electronic submission of documents.

Inspectors will be able to use live video to assess machinery, equipment, or working conditions. Employers will correspond electronically during inspections, submitting explanations and objections by e-mail, while the inspection protocol will be issued digitally.

Data Exchange Between PIP, ZUS, and KAS

The National Labour Inspectorate will be granted the right to cooperate and exchange data with the Social Insurance Institution (ZUS) and the National Tax Administration (KAS).

This will accelerate the identification of irregularities, especially regarding contributions and taxes. Data will be exchanged digitally, with fully automated verification processes, significantly enhancing efficiency.

Increased Budget and Higher Penalties for Employers

For 2026, PIP’s funding is expected to increase by around 10%. At the same time, stricter penalties will be introduced, particularly for misuse of civil law contracts.

  • Maximum fines imposed in administrative proceedings will double – from PLN 2,000 to PLN 5,000.

  • Court-imposed fines may rise up to PLN 60,000.

Risk-Based Inspections

Labour inspections will be planned based on risk analysis, with annual and long-term strategies focusing on industries and sectors most vulnerable to labour law violations.

Preparing Employers for the Reform

Although the bill is still at the legislative stage and may undergo further amendments, employers should already start preparing. The process may be time-consuming and requires a thorough review of current employment practices.

Employers should:

  • Audit civil law and B2B contracts – check whether they contain characteristics of employment and adjust documentation to reflect reality.
  • Define models of cooperation – clearly distinguish employment contracts from outsourcing or service contracts and prepare internal policies justifying these distinctions.
  • Develop alternative cooperation models – to protect competitiveness and ensure compliance with the new system.
  • Organise documentation and records – ensure compliance with labour law requirements across HR and payroll processes.
  • Conduct training for HR, payroll, tax, and procurement teams – prepare staff for new procedures and possible inspections.
  • Prepare an inspection response plan – including communication strategies and step-by-step scenarios in case of PIP audits.

Higher Minimum Wage and Hourly Rate in 2026 in Poland.

Posted on by kancelaria

Minimum wage – PLN 4,806 gross

As of January 1, 2026, the increased minimum wage in Poland will take effect, set at PLN 4,806 gross. At the same time, the minimum hourly rate applicable to mandate contracts (umowa zlecenia) and service contracts will rise to PLN 31.40. These changes were introduced by a regulation of the Council of Ministers published in the Journal of Laws. In practice, this means that compared to 2025, the minimum wage will increase by PLN 140, while the hourly rate will grow by PLN 0.90.

It is worth noting that this increase is smaller than expected – more than PLN 200 gross less than what the Ministry of Family, Labour and Social Policy had announced just a few months earlier.

The regulation of the Council of Ministers is a consequence of the lack of consensus within the Social Dialogue Council. Under the Minimum Wage Act, if the social partners do not agree on the level of the minimum wage and hourly rate within the statutory deadline, the government decides – no later than September 15 of the given year. At the same time, the amounts adopted in the regulation cannot be lower than the proposals previously submitted for negotiation.

Practical Consequences for Employers

The new minimum wage and hourly rate are significant not only for employees but will also have a direct impact on employers’ financial situation, particularly in the SME sector. Higher labor costs will affect company budgets, especially in industries with a high share of employees working at the minimum wage level. On the other hand, the statutory mechanism ensures that the real value of the minimum wage remains linked to inflation and economic dynamics, serving as a safeguard for employees’ purchasing power.

Rising labor costs

Increasing the minimum wage automatically raises the cost of employing staff paid at that level. To the gross salary, employers must add social security and health insurance contributions, further increasing the financial burden.

Social security contributions and benefits tied to the minimum wage

The rise in the minimum wage affects the level of numerous contributions and benefits, such as the basis for calculating social security (ZUS) contributions, the minimum base for sickness benefits, the night work allowance, and severance pay.

As a result, employers’ costs rise not only in terms of wages but also other mandatory payments.

Civil law contracts

The new minimum hourly rate (PLN 31.40) applies to mandate and service contracts. Employers and contractors will be obliged to adjust remuneration terms in such agreements. This may require contract renegotiations, especially in sectors where these forms of employment are widespread.

Impact on HR policies and service pricing

For SMEs, particularly in industries with a high share of low-paid workers (retail, services, construction), the increase in the minimum wage may necessitate higher prices for services or goods. Companies may also consider reducing employment levels or restructuring their workforce in favor of automation and process optimization.

Indirect effect – wage pressure

An increase in the minimum wage often leads to demands for raises among employees earning above the minimum level, creating broader wage pressure and further cost challenges for employers.

ZUS vs. Employers: a New Battle over Social Security Contributions on Free Employee Accommodation

Posted on by kancelaria

Entrepreneurs in Poland are facing increasing legal challenges related to taxation and social security contributions (ZUS) on free accommodation provided to employees. Although administrative courts increasingly rule in favor of companies in disputes with the tax authorities, a new battle has emerged – this time with the Social Insurance Institution (ZUS).

Victories in Administrative Courts

Despite the fact that tax offices consistently maintain that the value of free accommodation constitutes income for seconded employees, more and more companies are winning cases before administrative courts. The courts confirm that the value of free accommodation is not subject to PIT (personal income tax).

A key ruling for taxpayers was issued by the Supreme Administrative Court on 1 August 2023 (case ref. II FSK 270/21). The Court held that EU regulations indicate that transport and accommodation costs cannot be included in wages – they should be borne by the employer, not the employee. In its reasoning, the Court emphasized that benefits provided to employees posted to another EU Member State cannot be regarded as part of remuneration, either under labor law or under Art. 12(1) in conjunction with Art. 11(2–2b) of the PIT Act. These are not “free-of-charge benefits,” as they are fully covered by the employer.

New Practice by ZUS Raises Concerns

Meanwhile, the Social Insurance Institution has launched a new practice that may significantly burden businesses. As a result of inspections, ZUS has been issuing decisions requiring employers to pay contributions on employee benefits, including free accommodation. These actions appear irrational. Since the contribution base is the employee’s income as defined by the PIT Act, and the taxation of such benefits has been rejected in recent court rulings, ZUS’s actions raise legitimate concerns. The contribution base is, after all, income within the meaning of the income tax law. This inconsistency between institutions could lead to absurd situations in which an entrepreneur wins a case against the tax office but loses against ZUS in an identical matter.

There are already  judgments favorable to employers. The District Court in Poznań, in a judgment of 3 December 2024 (case ref. VIII U 1936/24), ruled that the costs of accommodation and transport borne by the employer do not constitute a basis for social security contributions.

Impact on Businesses

The new practice of ZUS could mean significant financial burdens for entrepreneurs, particularly in the construction sector, where employee posting is common. Of course, companies can appeal ZUS’s unfavorable decisions to court, hoping for a favorable ruling in line with current case law. However, such proceedings are time-consuming and require legal and/or tax advisory support, adding unnecessary complexity to an already difficult business environment.

Given the favorable rulings regarding both taxation and social security contributions, entrepreneurs who, based on administrative decisions, have been charged these payments have a good chance of obtaining refunds for overpaid taxes and/or ZUS contributions.

National e-Invoice System – Mandatory, But Not Yet. What’s Next for e-Invoice in Poland?

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The mandatory National e-Invoice System (KSeF) was supposed to be a revolution in the Polish invoicing system. Initially planned for the beginning of 2024, it has now been postponed due to technical issues until February 2026, when it is set to be implemented in a modified form.

What is KSeF?

KSeF is an IT system that enables the issuance and receipt of so-called structured invoices in a uniform XML format, with centralized tax oversight. Ultimately, it is intended to replace traditional paper and electronic invoices, and the data goes directly to tax authorities.

Since 2022, the system has been operating voluntarily—some entrepreneurs are already using it today, receiving, for example, a shorter VAT refund period (40 days instead of 60).

Why February 2026?

In January 2024, the Supreme Audit Office and accounting professionals raised alarms about deficiencies in performance testing, interface errors, and risks of failure. The Ministry of Finance, although it had long assured the system’s readiness, ultimately withdrew from the mandatory launch in June 2024 and announced consultations for a new timeline.

New Proposed Changes

From projects revealed by the Ministry of Finance in June 2025, the new version of the reform is expected to include:

  • Offline mode – the ability to issue invoices outside the system and later “send” them to KSeF,
  • QR codes on invoices – so that the recipient can verify and read them without needing an accounting system,
  • Additional deferrals for smaller taxpayers and “digitally excluded” taxpayers – The obligation to implement KSeF in February 2026 will only apply to large taxpayers whose sales exceeded PLN 200 million (including tax) in 2024, while other taxpayers will be required to implement the system in April 2026, and only from 2027 will the so-called digitally excluded taxpayers (those conducting transactions up to PLN 10,000 per month) be subject to the obligation,
  • Increase in the VAT exemption threshold – in 2026, the exemption threshold for VAT will increase from PLN 200,000 to PLN 240,000,
  • Postponement of penalties – penalties for violations related to KSeF will only be imposed starting January 1, 2027.

What Should Entrepreneurs Do Today?
Although the KSeF obligation has been postponed, it is worth preparing for its implementation:

✅ Verify and, if necessary, update accounting software – most popular systems (e.g., Comarch, Insert, Symfonia) already offer KSeF support,
✅ Test the issuance of structured e-invoices – even without the obligation,
✅ Implement emergency procedures – e.g., a protocol for lack of access to the system,
✅ Train accounting personnel – as handling XML files and communication with the KSeF API will become a daily routine.

Summary
KSeF remains one of the most important digitization projects for the tax authorities. The coming months will be crucial for refining its functionalities and enacting implementing regulations. Entrepreneurs who start preparations now will gain an advantage and avoid costly panic when the new deadline is announced.