A Polish limited liability company, sp. z o.o. (spółka z ograniczoną odpowiedzialnością), is taxed very differently from a sole proprietorship (JDG). A JDG's profit is taxed once, as personal income. A company's profit is taxed twice: once as CIT (corporate income tax) at the company level, and again as PIT (personal income tax) when profit is paid out to shareholders as a dividend. This guide covers the CIT rates and thresholds, how dividend tax works, and how the two structures compare financially, based on the rules in force in 2026.
PIT vs. CIT: two different systems
A JDG owner pays PIT directly on business income, under one of three forms: skala (12%/32%), podatek liniowy (a flat 19%), or ryczałt (2-17%, on revenue rather than income). There is no separate tax simply for spending your own income: once you have paid the relevant PIT, the money is yours.
A sp. z o.o. is a separate legal entity. It pays CIT on its own profit, either 9% for small taxpayers or 19% as the standard rate, and the money stays inside the company until the shareholders decide to distribute it. Taking that profit out as a dividend then triggers an additional 19% PIT for the shareholder.
CIT rates: 9% vs. 19%
Poland's CIT has two rates: 9% for small taxpayers and qualifying new companies, and 19% as the standard rate for everyone else. The 9% rate never applies to capital-gains income, such as the sale of shares or dividends received from another company: that is always taxed at 19%.
The gap matters. At 500,000 PLN of annual profit, a company on CIT 9% owes 45,000 PLN, while one on CIT 19% owes 95,000 PLN, a difference of 50,000 PLN.
Who qualifies for the 9% rate
Both of the following conditions have to be met at the same time (as of 2026):
- Small-taxpayer status: gross sales revenue in 2025 did not exceed 8,517,000 PLN (2 million EUR at the NBP exchange rate from October 1, 2025).
- Current-year revenue: net revenue in 2026 must not exceed roughly 8,431,000 PLN (2 million EUR at the January 2, 2026 rate), a limit you need to monitor continuously through the year.
If you cross the current-year limit partway through the year, the 19% rate applies retroactively to income from January 1, meaning you will owe back tax, plus interest on the earlier, underpaid advances.
New companies formed from scratch, not through a transformation, merger or division, can use the 9% rate right away, without needing a small-taxpayer track record, as long as they meet the current-year revenue limit.
Who is excluded from 9%, even under the limit
Meeting both revenue conditions is not always enough. You cannot use the 9% rate if:
- The company was formed by transforming a JDG, or through a merger or division (in the year of formation and the year after)
- The company received a contributed business, or business assets, worth over 10,000 EUR (in the year of formation and the year after)
- The company is a tax capital group
- The company is a family foundation
A company created by converting an existing JDG cannot use CIT 9% for its first two years, regardless of size, worth knowing if you are thinking about incorporating an established JDG.
Small taxpayers get one more benefit: a one-off depreciation write-off for fixed assets worth up to 50,000 EUR (213,000 PLN, as of 2026), covering most equipment (fixed-asset groups 3 through 8) except passenger cars. That lets you expense the full purchase cost in the year you buy, instead of depreciating it over several years.
The minimum tax: a trap for thin margins
Since 2024, Poland has applied a minimum CIT of 10% to companies that report a loss, or profitability below 2% of revenue, calculated on a specially defined base. Qualifying for the 9% rate does not protect you from this: a company can be eligible for CIT 9% and still owe the minimum tax if its margins are thin enough. Companies in their first or second year of operation are exempt, and small taxpayers are too, with some exceptions worth checking for your specific situation.
Dividends: the second layer of tax
A dividend is a distribution of company profit to its shareholders, decided by a shareholders' resolution on how to allocate the year's profit. It is usually paid in cash, though a payment in kind, such as transferring property, is possible and less common.
The rate is a flat 19% PIT, withheld by the company itself at the moment of payment. It does not depend on the size of the dividend, the company's CIT rate, or the shareholder's own tax situation, even if that shareholder separately runs a JDG on ryczałt.
Here is how it works for a small taxpayer with 200,000 PLN of profit before CIT:
- Profit before CIT: 200,000 PLN
- CIT at 9%: 18,000 PLN
- Amount left to distribute as a dividend: 182,000 PLN
- PIT on the dividend at 19%: 34,580 PLN
- The shareholder receives, net: 147,420 PLN
- Combined tax paid: 52,580 PLN, roughly 26% of the profit before CIT
Effective combined tax rate
| Route | CIT | PIT on dividend | Effective rate |
|---|---|---|---|
| Small taxpayer (9%) + dividend | 9% | 19% | ~26% |
| Standard CIT (19%) + dividend | 19% | 19% | ~34% |
| Estonian CIT, small taxpayer + dividend | 10%, only at payout | 19%, minus a 90% CIT credit | ~20% |
| Estonian CIT, other companies + dividend | 20%, only at payout | 19%, minus a 70% CIT credit | ~25% |
Estonian CIT (ryczałt od dochodów spółek) is a separate election where tax is deferred until profit is actually distributed. Reinvested profit is not taxed at all, for as long as it stays in the company. When a dividend is eventually paid, the shareholder can credit 90% of the company's CIT against their own 19% PIT if the company is a small taxpayer or newly formed, or 70% for other companies, which is what brings the effective combined rate down to around 20-25%. It carries its own eligibility conditions, including a requirement to employ at least three people and a restriction on holding shares in other companies, so it needs a proper look before you elect into it.
Other ways to take money out of a company
| Method | Tax | ZUS | Note |
|---|---|---|---|
| Dividend | 19% PIT, flat | None | No tax-free amount, no cost deductions |
| Employment contract salary | 12%/32% PIT (scale) | Full ZUS, employer and employee | The 30,000 PLN tax-free amount applies |
| B2B invoice from your own JDG | Depends on your JDG's tax form (ryczałt 8.5-17%, liniowy, or skala) | ZUS from the JDG | Can count as a hidden profit under Estonian CIT |
| Loan to a shareholder | No PIT, but interest counts as income | None | Must be interest-bearing, or it counts as a hidden profit under Estonian CIT |
How a dividend actually gets paid
- Approve the financial statements. The shareholders' meeting has to approve the statements for the year the profit came from, typically by June 30 of the following year for companies on a calendar fiscal year.
- Pass a resolution on profit distribution. Shareholders decide whether to pay a dividend, retain the profit as reserve capital, or split it partially.
- The company withholds and remits the tax. As the paying agent, the company withholds 19% PIT from each shareholder's dividend and pays it to the tax micro-account by the 20th day of the month after payment.
- The company files PIT-8AR. By January 31 of the following year, it reports the total dividends paid and tax withheld. The shareholder does not report the dividend on their own annual return and gets no separate tax statement for it.
Companies can also pay an advance on a future dividend during the year, if their articles of association allow it, the prior year's approved accounts show a profit, and the advance does not exceed half the profit earned since the end of the previous fiscal year. It is taxed exactly like a regular dividend.
sp. z o.o. vs. JDG, at a glance
| Feature | JDG | sp. z o.o. |
|---|---|---|
| Registration | CEIDG, free, same day | KRS, from 250 PLN plus a notarial deed, a few days |
| Capital required | None | Minimum 5,000 PLN |
| Liability | Your entire personal estate | Limited to your contribution, as a rule |
| Income tax | PIT: skala, liniowy or ryczałt | CIT: 9% (small taxpayer) or 19% |
| Tax on withdrawing profit | None, it is already yours | 19% PIT on dividends |
| ZUS | Mandatory | None for shareholders in a multi-shareholder company, unless employed or paid through the board |
| Bookkeeping | KPiR or a ryczałt register | Full accounting books, mandatory |
| Bookkeeping cost | 100-300 PLN/month | 400-800 PLN/month |
| Annual financial statement | Not required | Mandatory, filed with KRS |
One detail worth flagging: a single-shareholder sp. z o.o. does not get the ZUS exemption above. Its sole shareholder owes ZUS contributions on the same basis as a JDG owner; the exemption only applies when there is more than one shareholder.
If you are just starting out, or your income is comfortably under 120,000-150,000 PLN a year, our guide to registering a JDG covers the simpler path.
Common questions
Can a JDG use the 9% CIT rate? No. CIT applies only to companies that are legal persons. A JDG's profit is taxed under PIT instead.
Can a brand-new company use CIT 9% right away? Yes, as long as it was not formed by transforming, merging with, or splitting off from an existing business, did not receive a contribution of assets worth over 10,000 EUR, and its current-year revenue stays under the limit.
What happens if a company crosses the revenue limit for CIT 9% partway through the year? From the month of the crossover, advance payments switch to the 19% rate, and income from the start of the year has to be retaxed at 19%, so you will owe the difference, plus interest on the advances that were underpaid earlier in the year.
Does a shareholder have to report dividends on their personal tax return? No. The company withholds the 19% PIT and files PIT-8AR on the shareholder's behalf. The shareholder does not file anything separately for it.
Can profit stay in the company without triggering tax? Yes. Profit allocated to reserve capital, rather than distributed, is not taxed at the shareholder level. Tax on that portion only arises once it is eventually paid out as a dividend.
If you are weighing a company against invoicing as a contractor, our guide to B2B contracts and take-home pay breaks down what actually lands in your account either way.
Plumm handles CIT, VAT and payroll filings for Polish companies, with an English dashboard and an AI assistant that explains the numbers in plain language. Start a free trial.
This article is general information, not tax advice, and reflects the rules in force in 2026. Corporate tax filings in Poland are submitted in Polish, and Plumm prepares and files them for you.