Global top-up tax – Polish bill signed into law

On 15 November 2024, the President signed into law the act on top-up tax applicable to members of international and domestic corporate groups.

The Act transposes into the Polish legislation the EU Council Directive which implements the global anti-base erosion model rules, which are the core part of the OECD Pillar 2 framework. These rules are expected to be the basis for establishing a minimum level of taxation of business operations worldwide.

What is global top-up tax?

Top-up tax is levied on corporate groups whose consolidated revenues exceeded 750 million euro in two of the last four years and whose effective tax rate is not higher than 15%.

The global minimum tax system should be based on three types of top-up tax:

• global top-up tax (IIR)
• domestic top-up tax (QDMTT)
• tax on undertaxed profits (UTPR).

Solutions for Polish Investment Zone (PIZ)

Entities operating in Special Economic Zones and the Polish Investment Zone, as well as those enjoying other tax relief options face the highest risk of having to pay the top-up tax.

The Ministry of Development and Technology has announced that it is working on a solution, in the form of cash grants, to keep attractive conditions for businesses to invest in special economic zones. The grant amount would depend on the value of the investment project, the location and the declared number of qualitative criteria.

Please note that the legislators provide for transitional provisions and various mechanisms to limit the negative impact of the new taxation. Therefore, it is reasonable to carry out a preliminary check of the so-called permanent and temporary safe havens.

Trust the experts

The global minimum tax rules are very complicated and require a good knowledge of accounting and income tax regulations. To comply with those rules, taxpayers must carry out elaborate analyses and simulations, as well as take decisions, which require close cooperation between tax experts, accountants and persons in charge of reporting.

We will be glad to support you in fulfilling the new obligations. Contact us to get a first check analysis to assess the impact of the legislation on your tax accounts in Poland and develop a further action plan.