The government plans to revolutionize CIT in Poland –so-called Estonian CIT to be introduced

The Ministry of Finance plans to implement in 2021 so-called Estonian CIT The main purpose of the planned changes is increase of investments in Poland, since funds reinvested will not be taxed until they are paid out to shareholders. The solution may be used by about 200k companies in Poland.

The concept of the new model

  • The income is not taxable, as long as it is reinvested.
  • It is taxable only when it is spent on consumption (e.g. dividends, but not only).
  • Two possibilities:
    • “Full” taxation model only on income distributed by the company,
    • special investment fund (account) – a taxpayer will be able to recognize write-offs on such investment account as tax deductible costs.

For whom (all criterion must be met)

  • Small and medium-sized capital companies (limited liability and joint stock companies):
    • whose revenues do not exceed PLN 50 million,
    • in which only individuals are shareholders,
    • that do not hold shares in other entities,
    • which employ at least 3 employees, excluding its shareholders,
    • whose passive income does not exceed operating income,
    • that incur capital expenditures.
  • The company chooses this form of settlements for a period of 4 years and can extend it for further 4-year period.
  • Extension is possible provided that the company still meets the criteria in the last, fourth year of using the Estonian CIT. The company’s exceeding the PLN 50 million threshold during the 4-year period does not exclude it from the model.


  • No need to keep separate records for tax purposes.
  • Obligation to submit a tax return and pay the tax in the month following the month in which the dividend was paid or the profit was distributed in another form, or the payment not related to business activity was made.

Estonian CIT may be a particularly important solution for small and medium entrepreneurs who have problems with obtaining financing for new investments.

If you have additional questions about the above, please contact us.

Łukasz Bączyk
Head of Tax, Board Member

Jarosław Szajkowski
Tax Manager – Tax Adviser

Marta Skrodzka
Tax Manager – Tax Adviser

Piotr Szeliga
Tax Manager – Tax Adviser

Paweł Jóźwik
Tax Manager – Attorney-at-law

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