Revolutionary Changes in PIT and CIT in 2026

The government has announced a plan for a comprehensive amendment to the PIT and CIT Acts, which will take effect in 2026. Below are the key changes.

PIT Act Amendments

Changes to IP Box

• Solidarity Levy and IP Box. Income from the IP Box will be included in the tax base for calculating the solidarity levy, allowing for the deduction of losses, as long as these losses relate to the same source of revenue. The solidarity levy rate itself will remain unchanged at 4% of any income exceeding PLN 1 million.
• IP Box Eligibility. The proposed amendment introduces a new requirement for businesses that wish to benefit from the IP Box. If the bill is passed in its current form, such companies will need to employ at least 3 people to qualify for this tax preference.

Other Changes for PIT Taxpayers

• Limited Application of Housing Relief. The planned amendments to housing relief mean that it will only be available to taxpayers purchasing a single flat or piece of land, provided that they do not own any other residential property. This change echoes the original purpose of this relief: to assist taxpayers in meeting their own housing needs, rather than encouraging investment in real estate.
• Limited Opportunity to Adjust Depreciation Rates. Changing the depreciation rates after the annual return has been filed will no longer be an option.
• Incentive Schemes and Employment Income. Income earned by employees who participate in incentive schemes based on financial instruments, such as subscription warrants, will be classified as employment income and taxed accordingly.
• Donations after Leasing. If an item that has previously been leased by the taxpayer is donated to a member of the immediate family or another person who is exempt from gift and inheritance taxes, any subsequent sale of that item will be subject to tax if it occurs within 3 years of the donation (currently, this period is only 6 months).
• Datio in Solutum. The bill states that when real estate ownership is transferred in exchange for the taxpayer being released from debt, this will be regarded as a sale for tax purposes. In such cases, the taxable revenue will be equal to the amount of debt that has been settled.
• 17% Flat Rate. Services rendered between related parties (e.g., between a shareholder and a company) will be subject to a flat tax rate of 17%, which should limit the possibility of reducing dividends by applying preferential tax rates.

CIT Act Amendments

Changes for the Real Estate Sector

• Real Estate Depreciation. The proposed amendment expands the prohibition on real estate depreciation in real estate companies to include properties classified as investments. This change aims to better align tax depreciation rules with the balance sheet. However, it could significantly affect companies that have previously relied on substantial depreciation deductions for their investment properties.

Changes to Estonian CIT

• Broader Definition of Hidden Profits. The definition of hidden profits, which has been the subject of controversy, will be revised. Under the proposed amendment, hidden profits will no longer need to be connected to the right to share in profits. Additionally, the list of benefits regarded as hidden profits will be broadened to include items such as rental fees, licences, and compensation for management, brokerage, and advisory services.
• Long-Term Consequences of Estonian CIT. The bill stipulates that if a taxpayer who has stopped using Estonian CIT makes any payment or distribution, this action will be treated for tax purposes as a distribution of income derived from the net profit earned while Estonian CIT was in effect.
• New Definition of Non-Business Expenses. The bill introduces a new definition for the purposes of Estonian CIT regulations. Previously, expenses unrelated to business activities lacked a precise definition, and taxpayers had to rely on case law for clarification. According to the proposed amendment, such expenses will include, among others, costs that do not contribute to revenue generation, as well as fines and penalties.
• Simplified Transition to Estonian CIT. The bill introduces a minor simplification for taxpayers who wish to switch to Estonian CIT. A taxpayer can benefit from this tax regime even if their financial statements are not signed within the statutory deadline, as long as the remaining requirements are met.
• New Definition of a Taxpayer Starting a Business. The bill introduces a new definition into the CIT Act. According to this definition, only entities that genuinely begin engaging in activities subject to CIT will qualify as taxpayers starting their operations. Notably, the new definition excludes entities that are simply continuing the operations of an existing business.

Other Changes for CIT Taxpayers

• Minimum CIT Exemption. The bill provides for an exemption for businesses whose profitability has reached at least 2% in one of the last 2 tax years. In addition, the bill differentiates the rates of the simplified tax base depending on the size of the taxpayer: large taxpayers will pay tax on 5% of their operating income, and others will pay tax on 3%.
• Liquidation of Partnerships and Taxation of Assets. Partners’ income from the liquidation of a partnership created as a result of the transformation of a company will be subject to taxation if the liquidation takes place within 3 years of the transformation. On the other hand, funds and assets transferred to partners will be classified as capital gains.
• Prohibition on Goodwill Amortisation. As a result of the planned changes, it will not be possible to make amortisation write-offs on the goodwill resulting from the paid use of an enterprise or an organised part thereof.
• Clarification of the Definition of a Small Taxpayer. The rules for determining the relevant revenue will be specified in the case of a shortened or extended tax year.
• Clarification of Diverted Profits Tax Rules. The bill clarifies the existing tax regulations in this regard.

How We Can Help

Although the regulations will not come into effect until 2026, it is worth beginning preparations for the planned changes now. Some of them will be truly revolutionary and will significantly impact taxation under current business models. Conducting a thorough analysis will enable you to:

• evaluate how the new regulations will affect your business model;
• identify potential areas of tax risk;
• adapt financial and organisational structures to minimise adverse effects;
• capitalise on opportunities created by the reform;
• avoid costly errors and allow time for a safe implementation of changes.

For more advice, please contact our Head of Tax Piotr Prokocki.