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Tax on shifted profits

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by ​Katarzyna Niedabylska

3 January 2023


So-called tax on shifted profits has been in force in Poland since 2022. It is payable by Polish CIT payers who:

  • have their registered office or management in Poland,
  • conduct business through a permanent establishment located in Poland. 

The tax is payable on certain expenses incurred for (Polish or foreign) associated enterprises. It applies to expenses on:

  • intangible services, 
  • licenses, copyrights, 
  • know-how,
  • fees for the transfer of the risk of debtor's insolvency,
  • debt financing,
  • charges and fees for the transfer of functions, assets or risks. 

In practice, this means that a Polish CIT payer who purchases the aforementioned services from associated enterprises must pay 19% tax on them. The tax should be disclosed in the annual tax return and paid by the tax return filing deadline. 

The tax on shifted profits must be calculated by CIT payers whose expenses incurred for both associated enterprises and independent entities exceed 3% of their total tax-deductible expenses. 

Exemption from the tax on shifted profits is available provided that certain conditions are met as to the status of the recipient of the above-mentioned amounts (among others, in terms of verification whether it carries on substantial genuine business activity, the applied effective income tax rate, recognition for tax purposes and use of amounts received from a Polish CIT payer).


If you have any questions about the tax on shifted profits, please contact us.

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Katarzyna Niedabylska

Tax adviser (Poland), Attorney at law (Poland)

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