Estonian CIT in Poland from 2027: could the mid-year entry route disappear?

A company planning to enter Poland’s Estonian CIT regime halfway through 2027 should prepare an alternative timetable now. The legislation under consideration removes the provisions allowing it to close its existing tax year and begin lump-sum taxation of company income during that year. A July start may therefore cease to be available to a company whose tax year follows the calendar year.

How entry works under the current rules

The current Polish rules allow a company to elect lump-sum taxation of company income, commonly known as Estonian CIT, during its tax year. It must close its accounting books on the last day of the month preceding the start of the regime and prepare financial statements in accordance with accounting law. Under Article 28j(1)(7) of the Corporate Income Tax Act, the company must also submit the ZAW-RD notification by the end of the first month of its first year under the regime.

These formalities do not replace the company’s eligibility conditions. Ownership structure, revenue types, employment and possible statutory exclusions must also be reviewed. The initial tax adjustment and the history of conversions or other reorganisations deserve separate consideration.

What the legislation under consideration would change

The Sejm text would repeal Article 8(6a), Article 28e(2) and Article 28j(5) of the Polish CIT Act. Article 8(6a) allows the existing year to end for this purpose; Article 28e(2) defines the year under the lump-sum regime in that situation; Article 28j(5) governs the mid-year election. Repealing these provisions would close that route to an existing company wishing to change systems halfway through its tax year.

This would not abolish Estonian CIT. Removing the mid-year election would not, by itself, require every company already using the regime to return to standard CIT. The legislative package also contains other changes affecting this system, however, so checking the ZAW-RD date alone is insufficient.

The legislation is generally intended to enter into force on 1 January 2027, with separate dates for some provisions. A specific transition requires reading the provisions applicable to the company’s own circumstances, particularly where its tax year differs from the calendar year.

Why the government proposes removing mid-year entry

According to section 12 of the explanatory memorandum to paper 3137, this route was introduced when Estonian CIT was liberalised to let more companies enter quickly. The bill’s sponsor considers that objective achieved and says retaining the route produces disputes about closing books and preparing financial statements. The memorandum cites the Ministry of Finance’s general interpretation of 25 January 2024, DD8.8203.1.2023, as an example of the need to clarify the rules.

That reasoning explains the combination of two measures: closing the route for future elections and remedying certain earlier formal problems. It does not release a current company from its obligations. The remedial provision in Article 5 of the amending legislation must be assessed separately from the date of a new election.

Example: a company plans to enter on 1 July 2027

The decision is therefore more than bringing forward a form submission. The comparison data, eligibility assessment and accounting timetable must already be ready. Changing the entry date also affects investment accounting, the use of tax reliefs and planned payments to owners.

Build the financial model before selecting an entry date

A comparison of standard and Estonian CIT should show how much profit will stay in the company and when funds will reach shareholders. A company funding growth with retained earnings faces a different decision from one distributing most of its annual profit.

The model must also include benefits provided to shareholders and related parties, such as rent, financing, services or use of assets. A market price alone does not complete the hidden-profit analysis. Omitting these flows may produce an attractive spreadsheet result that does not hold up in actual tax settlements.

Identify the tax preferences the company currently uses and how changing systems would affect them. Comparing nominal rates alone leaves out a material part of the calculation.

Documents to prepare before year-end

• The current shareholder structure and a list of interests and rights held by the company.
• A breakdown of revenue, employment data and information about planned organisational changes.
• A forecast of profits, investments and distributions for at least two entry-date scenarios.
• Contracts and settlements with shareholders and other related parties.
• A schedule of tax/accounting differences, tax reliefs used and the reorganisation history.
• A timetable for closing books, preparing financial statements and submitting notifications, agreed with the accounting team.

Separate remedial rules for earlier financial-statement problems

The Sejm text also addresses certain taxpayers whose earlier mid-year entry was challenged because financial statements were not prepared or were prepared late. It provides for specified steps by 31 January 2027 and mechanisms for corrections or reopening proceedings. This is a separate remedial measure subject to its own conditions. It does not create a new right to choose any mid-year start date in 2027.

Estonian CIT entry: financial-statement signatures, shareholders and rent

Late management signature on financial statements: does Estonian CIT entry remain effective?

In the ruling of 15 October 2026, 0111-KDIB1-1.4010.540.2026.1.RH, a company sought entry from 1 November 2023. Books closed on 31 October; the statement was prepared in November, signed by the accountant in January 2024 and by the sole director only on 4 November 2025. KIS rejected effective entry. Required signatures were part of preparing the statement under CIT Article 28j(5) and Accounting Act Articles 45 and 52; a timely file alone was insufficient. This applied the rules for that entry and did not decide eligibility for proposed remedial legislation.

The distinction between producing a file and completing financial statements had a direct tax effect. KIS connected CIT entry with accounting requirements, including the required signatures. A review of past elections therefore needs the dates of closing the books, preparing the document and obtaining each signature.

Are paper financial statements enough for mid-year Estonian CIT entry?

In the ruling of 7 October 2026, 0111-KDIB1-1.4010.519.2026.1.LG, KIS rejected mid-year entry from 1 March 2022 where the statement had handwritten signatures. It required electronic form and a qualified, trusted or personal electronic signature permitted by Accounting Act Article 45(1f). A handwritten signature on paper is not the statutory Polish personal electronic signature. Reviewing earlier entries requires examining files and signatures, not just the ZAW-RD submission date.

The issue extended beyond whether management knew the document’s contents. Accounting law specifies its format and permitted signatures. A Polish personal signature here is an electronic signature rather than handwriting. That distinction explains why retaining a signed printout did not resolve the company’s problem.

A family foundation shareholder: when can the company elect Estonian CIT?

The ruling of 14 May 2026, 0111-KDIB1-1.4010.125.2026.2.SG, concerned entry from December 2025. The foundation sold its shares to an individual on 23 December and notice was filed on 29 December. KIS confirmed that entry from the beginning of that month was ineffective: a legal person remained a shareholder for part of the month, contrary to Article 28j(1)(4). It nevertheless accepted a fresh election from January 2026 if other conditions were met. Since the company had never acquired the right, it had not lost it so as to trigger Article 28l(2)’s waiting period. This particular ineffective-entry outcome does not abolish the general waiting rule.

KIS distinguished an ineffective election from losing an already acquired right. The shareholder condition was not met at December’s opening. January’s filing therefore involved a new election under a changed ownership structure. Compare the share-transfer date with the start of the proposed tax period, rather than only its filing deadline.

Renting a shareholder’s building under Estonian CIT: when is rent a hidden profit?

In the ruling of 9 September 2026, 0111-KDIB2-1.4010.391.2026.2.ED, KIS accepted the described rental of two buildings. The company had genuine operations, employees and its own operating assets; the premises met real business needs and rent was at market value. Article 28m(3) still requires examination of the benefit’s link to profit rights and the assets made available to the company. Market rent alone does not guarantee the same result.

KIS examined the rental’s business purpose in an operating company. The buildings served genuine needs alongside its own assets and employees. The rent paid for actual access to property. Article 28m(3) therefore calls for examining payment terms, the property’s operating role and its connection to the shareholder’s profit rights.

Financial statements and factoring under Estonian CIT: what is disputed?

The Poznań WSA dismissed a challenge concerning late financial-statement signatures on mid-year entry in its judgment of 1 April 2026, I SA/Po 289/26. It also explained that a draft remedial solution could not replace current law. A similar outcome followed on 28 July 2026, I SA/Po 494/26: the accountant signed within three months, management later, and the challenge was dismissed. CBOSA identifies both judgments as not final at verification. They illustrate formal risk without deciding the effect of subsequent remedial legislation.

A different condition arose in the Gliwice WSA judgment of 13 August 2026, I SA/Gl 1232/25, also not final. The court quashed a ruling treating the described non-recourse factoring of own trade receivables as receivables income within Article 28j(1)(2)(a). Financing ongoing manufacturing differed from passive trading in acquired receivables. The connection to genuine operations and the contract mattered. This is neither an automatic exclusion for every product called factoring nor a finally settled dispute.

Numerical models: reinvestment and the 50% boundary

Our revenue-mix model. Assume a correctly established PLN 10 million prior-year test base, including output VAT where Article 28j(1)(2) requires it. If the combined listed revenue categories are PLN 2 million, their share is 20%. PLN 5 million means exactly 50%, which fails the requirement of “less than 50%”. Aggregate the statutory categories, including relevant low-value-added related-party transactions. Classify receipts and establish the denominator first: mechanically adding factor payments can double-count the same sale. Check Article 28j(2)’s exception for newly established businesses.

Entry review therefore combines Article 28j conditions, Article 28k exclusions, accounting documents and cash-flow modelling. The ZAW-RD deadline is one component. Another taxpayer’s ruling gives no individual protection, and a favourable judgment that is not final does not remove the need to review the company’s contract and the eventual court outcome.

Current entry procedure: accounts, transition and deadlines

Estonian and standard Polish CIT: building a decision model

TLP can combine an eligibility review with the financial model and a timetable for changing your Polish corporate taxation.

Let’s discuss your situation

Briefly describe your business situation and the question you would like to resolve. We will agree the scope of the analysis and the documents needed in our reply.

Starting points for our discussion

• The current shareholder structure and a list of interests and rights held by the company.
• A breakdown of revenue, employment data and information about planned organisational changes.

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