Will the largest enterprises really need to prepare for higher tax burdens, and will companies approaching the new thresholds need to revise their budgets and investment plans?
What does the tax reform package include?
On 19 August, the Prime Minister and the Minister of Finance presented the framework of a broad tax reform which, according to the announcement, would come into force, at least partially, on 1 January 2027. The proposed measures are intended to address economic changes and rising wage levels observed in recent years in Poland. The reform aims, on the one hand, to align the tax system with current economic realities and, on the other, to maintain the stability of public finances.
The largest portion of the announced changes concerns Personal Income Tax (PIT), including modifications to the existing tax thresholds and rates. At the same time, the government is proposing a number of measures affecting businesses and taxpayers with the highest incomes. Based on the published assumptions, the reform has been designed so that the benefits resulting from PIT changes would be offset by additional budget revenues generated from other areas of the tax system. As a result, the entire package is intended to remain fiscally neutral from the perspective of public finances.
How much will CIT tax increase for the largest businesses from 2027?
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The planned changes largely concern Corporate Income Tax (CIT). The government proposes increasing the standard CIT rate from 19% to 22% for taxpayers generating annual revenues exceeding the equivalent of EUR 50 million. The higher rate would also apply to tax capital groups.
In practice, this means that the planned CIT increase would affect only the largest entities, while all other taxpayers would continue to benefit from the currently applicable tax rules. It is also worth noting that the higher CIT rate would apply to the entire taxable income rather than only to the portion exceeding the threshold.
At the same time, the CIT rate increase does not exhaust the government’s announced plans regarding the taxation of businesses. According to media reports, additional proposals are expected to be presented after the Ministry of Finance completes its analytical work. The Prime Minister has announced that further elements of the reform will be introduced gradually.
Planned CIT reform and its impact on businesses
The implementation of the proposed changes may have significant implications for companies that already generate revenues qualifying them for the higher CIT rate. In particular, the changes may result in:
- reduced net profits if a company chooses not to offset the higher tax burden by increasing the prices of its products or services,
- pressure on suppliers’ margins,
- reduced funds available for investment, business development and innovation,
- lower profits available for dividend distributions to owners and shareholders,
- greater pressure to optimise costs, which in some cases may translate into slower wage growth or fewer new jobs being created.
Moreover, the potential impact may also be felt by businesses that do not yet exceed the EUR 50 million revenue threshold but are approaching it. In such cases, some companies may analyse how further sales growth or business expansion could affect their future tax liabilities.
It cannot be ruled out that certain entities may consider organisational changes such as splitting operations into new companies or branches, optimising group structures, or even suspending investments in Poland in favour of conducting business in other countries.
It should be remembered, however, that any restructuring activities should be supported by genuine business and economic justification. If tax authorities were to conclude that their primary purpose was solely to avoid the higher CIT rate, this could increase the risk of tax audits and challenges to the adopted arrangements. Therefore, any decisions concerning changes to business structures should be preceded by a detailed tax and legal analysis.
Other tax system changes announced by the government
The package of announced measures also includes a widely discussed modification of the PIT tax scale. The government proposes increasing the first PIT threshold from PLN 120,000 to PLN 130,000 and introducing an additional 24% tax rate for income between PLN 130,000 and PLN 150,000. Income exceeding PLN 150,000 would continue to be taxed at the 32% rate. According to announcements from the Ministry of Finance and Economy, this solution could affect approximately 3.5 million taxpayers, with a maximum annual tax benefit of up to PLN 3,600.
In addition, the proposed reform assumes a significant restriction of the availability of the lump-sum tax on recorded revenues by reducing the revenue threshold allowing the use of this form of taxation from EUR 2 million to EUR 250,000.Furthermore, the solidarity surcharge is planned to increase from 4% to 5% for individuals earning more than PLN 1 million annually. The announcements also include changes concerning the IP Box regime; however, no detailed proposals have yet been presented at this stage.
At present, the announced measures remain proposals and do not yet constitute binding law. Their implementation will require completion of the full legislative process. According to government declarations, the new regulations are expected to apply from 2027; however, both their final shape and effective date may still change during the legislative process.
Therefore, a detailed assessment of the impact of the planned reform on businesses and taxpayers will have to wait until draft legislation and explanatory memoranda are published. We will continue to monitor the progress of the reform and keep you informed of the most important developments and their potential impact on business operations on the Grant Thornton website.
