In 2025, Poland introduced a number of significant changes to the tax system that affect both entrepreneurs and individuals. Below are the most important ones:

1. Cash PIT

From 1 January 2025, entrepreneurs can settle income tax using the cash method. This means that tax is paid only when payment is received from the contractor, and not when an invoice is issued or a service is provided. This change is intended to improve the financial liquidity of companies. The change covers both revenues and costs – expenses are recognized when they are actually paid.

The cash method of settling PIT can be used by entrepreneurs running a sole proprietorship independently:

• taxed according to the tax scale, flat tax, IP BOX rules, lump sum on recorded revenues
• if the revenue from the activity in the year preceding the tax year did not exceed PLN 1,000,000
• if they do not keep accounting records
• if they submit written declarations to the appropriate head of the tax office about their choice of the cash method

2. Health insurance contribution

Changes have been introduced in the payment of health insurance contributions by entrepreneurs. The new regulations aim to simplify the system and adjust the contribution amount to the real income of entrepreneurs.

The most important changes are:

• exclusion of income and costs related to the sale of fixed assets from the contribution base. This is a voluntary solution, entrepreneurs will be able to decide for themselves whether including income from the sale of a fixed asset, and thus costs related to its acquisition in the part not included in the costs of obtaining income (not depreciated), in the basis for calculating the health insurance contribution will be more beneficial for them. If so, they will be able to include them, if not, they will not have to include income from the sale of a fixed asset in the contribution base.
• reduction of the minimum basis for calculating the health insurance contribution. Entrepreneurs taxed under general rules or with a flat tax pay a health insurance contribution of 9 percent or 4.9 percent of income, with the proviso that their contribution cannot be lower than 9 percent of the minimum wage. From 2025, the minimum health insurance contribution for entrepreneurs taxed under general rules, with a flat tax and with a tax card will be 9 percent of 75 percent of the minimum wage.

The minimum health insurance contribution after the changes will be PLN 314.96 PLN per month. Entrepreneurs with the lowest income and those who suffer losses will gain monthly 104.98 PLN.

3. Property tax

As of 1 January 2025, new definitions of buildings and structures in the Local Taxes and Fees Act will apply. These changes are intended to standardise the interpretation of regulations and eliminate previous ambiguities.

The new definitions and concepts are not intended to expand the scope of taxation of entrepreneurs’ assets. However, there may be situations in which a building, structure, construction device or technical device will be classified differently than before, which may result in a change in the amount of tax burden. The new definitions of buildings and structures are key for entrepreneurs.

IMPORTANT : If you run a sole proprietorship and you believe that the introduction of new definitions of a building or structure affects the way your company pays real estate tax, submit an update of information on real estate and buildings (IN-1) to the appropriate municipal office by January 14, 2025 .

4. JPK CIT

The obligation to submit the Standard Audit File for the CIT tax (JPK CIT) has been introduced. From 1 January 2025, the largest corporate income tax payers with revenues exceeding EUR 50 million will be required to keep accounting books only in electronic form and to send them to the tax office without a request after the end of the tax year (JPK-CIT), by the deadline for filing the CIT-8 tax return (in practice by 31 March 2026 for 2025).

5. VAT exemption for small businesses operating in the EU

Small companies operating in the European Union can benefit from VAT exemption, which is intended to facilitate doing business and reduce administrative burdens.

Companies based in another EU Member State will be able to obtain VAT exemption in Poland. Polish companies operating in other EU Member States will be able to benefit from the exemption under the conditions provided for in those countries.

Companies based in Poland that wish to benefit from the exemption in other EU countries should submit a registration application to the Second Tax Office in Warsaw-Śródmieście and submit quarterly turnover reports in each EU Member State in which they operate to the relevant tax office in Poland.

6. Accounting bookkeeping limit

The revenue limit, after which entrepreneurs are required to keep full accounting books, has been raised. This change aims to adapt the regulations to market realities and relieve smaller companies.

Individuals, partners in civil partnerships, general partnerships of individuals and professional partnerships will be obliged to keep accounting books if their revenues equal to or exceed EUR 2.5 million.

7. Excise duty on tobacco products

In 2025, excise tax increases on tobacco products were introduced, which is an element of the state health policy aimed at reducing the consumption of these products.

• The excise tax rate on cigarettes will increase by 25 percent to PLN 345/1,000 pcs.
• The excise duty rate on smoking tobacco will increase by 38 percent to PLN 260.14/kg
• The excise tax rate on cigars and cigarillos will increase by 25 percent to PLN 655/kg
• The excise duty rate on innovative products (heated tobacco products) will increase by 50 percent to PLN 565.52/kg
• The excise duty rate on e-cigarette liquid will increase by 75 percent to PLN 0.96/ml

8. Global Equalization Tax

From 1 January 2025, the global pillar tax (Pillar II) rules will be introduced, covering groups with consolidated revenues above €750 million per year. If the effective tax rate is below 15%, the company will pay pillar tax.

9. Deposit system

From October 2025, Poland will introduce a deposit system that will cover beverage packaging. The aim is to increase recycling and reduce environmental littering.