What do the 9% and 19% CIT rates mean for your company?
The 19% rate is the basic CIT level in Poland, and 9% is a preference for selected taxpayers. The lower rate only applies to income other than capital gains and requires meeting additional conditions.
Legal basis for the 9% and 19% rates
CIT rates are defined in Art. 19 of the Corporate Income Tax Act. The act is available in the Internet System of Legal Acts at isap.sejm.gov.pl. You can also find an official discussion of the rates in the CIT tax description on biznes.gov.pl.
What income does the 9% rate cover?
The 9% rate applies to revenues and income other than capital gains, e.g., from the sale of goods or services. Income from dividends, disposal of shares, or other capital gains is still taxed at 19%. This is a commonly confused point when planning taxes in a company.
Table: basic CIT rate vs. the 9% preference
| Type of income | Standard CIT rate | Possible preferential rate |
|---|---|---|
| Income from operating activities | 19% | 9% if small taxpayer conditions are met |
| Income from capital gains | 19% | No possibility of 9% CIT |
| Income of a new company in the first year | 19% | 9%, if revenue limits are met and there are no reorganization restrictions |
When can your company use the 9% CIT rate?
Your company can use 9% CIT if it has the status of a small taxpayer or is starting its operations and stays within the revenue limits. Additionally, revenues in the tax year cannot exceed the equivalent of 2 million EUR.
Conditions for a small taxpayer
A small taxpayer is an entity whose sales revenue (including VAT) in the previous year did not exceed 2 million EUR. This amount is converted to PLN according to the NBP exchange rate from the first working day of October of the previous year, rounded to the nearest 1,000 PLN. Small taxpayer status is essential for most companies wanting to use 9% CIT.
Conditions for companies starting operations
A new company can use 9% CIT in its first tax year, even without small taxpayer status. However, this exclusion applies to companies formed as a result of transformations, divisions, and certain in-kind contributions, as referred to in Art. 19(1a)–(1c) of the CIT Act. In practice, this means that a simple start “from scratch” is privileged, while restructurings are analyzed more strictly.
The 2 million EUR revenue limit in the tax year
In addition to small taxpayer status, your company cannot exceed net revenues corresponding to 2 million EUR in a given tax year. The limit is converted according to the EUR exchange rate from the first working day of the tax year, rounded to the nearest 1,000 PLN. You can find the official limits on the Ministry of Finance’s tax portal under the CIT – limits tab.
What revenue limits determine the 9% CIT in 2025 and 2026?
The right to 9% CIT is determined by two types of limits: sales revenue from the previous year and current revenue in the tax year. The limits are expressed in PLN but are based on the equivalent of 2 million EUR.
Limits for small taxpayer status
For small taxpayer status, we look at the sales revenue (including VAT) from the previous year. For a small CIT taxpayer in 2025, the limit for 2024 is 8,569,000 PLN. For 2026, the planned limit for 2025 is 8,517,000 PLN, according to available calculations based on the exchange rate from October 1, 2025.
Limits on current revenue in the tax year
You separately monitor the 2 million EUR limit of net revenue achieved during the tax year. For 2025, this limit corresponds to approximately 8,534,000 PLN for a calendar year. After exceeding this limit, the company loses the right to 9% CIT for that year.
Table: example limits for 9% CIT with a calendar year
| Tax year | Sales revenue limit (incl. VAT) for the previous year (small taxpayer) | Current net revenue limit in the year (2 million EUR) |
|---|---|---|
| 2024 | 9,218,000 PLN (small taxpayer status for 2024) | 8,687,000 PLN (limit for 9% CIT in 2024) |
| 2025 | 8,569,000 PLN (small taxpayer status for 2025) | approx. 8,534,000 PLN (limit for 9% CIT in 2025) |
| 2026 | 8,517,000 PLN (small taxpayer status for 2026) | to be calculated based on the EUR exchange rate from the 1st working day of 2026 |
When do you lose the right to 9% CIT and switch to the 19% rate?
You lose the right to 9% CIT when your company exceeds the 2 million EUR revenue limit in the tax year. As a result, the income for the entire year must be taxed at the 19% rate, and advance payments require adjustments.
Exceeding the limit during the year
If current revenues exceed the 2 million EUR limit during the year, subsequent CIT advance payments should be calculated at the 19% rate. After the year ends, you will recalculate the entire income at 19% in the CIT-8 return, and the previously applied 9% requires equalization. Tax authorities confirm that exceeding the limit means losing the right to the preference for the entire year.
Losing small taxpayer status
If in 2024, sales revenue (including VAT) exceeds 8,569,000 PLN, your company will lose its small taxpayer status for 2025. In practice, this means no basis for applying 9% CIT in 2025, even if current revenues do not exceed 2 million EUR. Similar logic will apply when moving from 2025 to 2026.
Typical situations causing a switch to 19% CIT
- dynamic sales growth in the second half of the year,
- a one-off large transaction that pushes revenue over the limit,
- combining several business lines in one company instead of in separate entities,
- changing billing models with contractors to higher invoice volumes,
- improper monitoring of revenues at the entire company level, not just a single project.
Which companies cannot use 9% CIT?
Certain categories of entities and companies after specific transformations are excluded from the 9% CIT preference. You also cannot use 9% CIT for income from capital gains.
Entities excluded from the 9% preference
Tax capital groups and family foundations, among others, cannot use 9% CIT. Restrictions also apply to companies formed as a result of division, transformation, or contributing an enterprise in kind, during the period specified in the act. For such restructurings, the 19% rate is standard.
Income from capital gains
You cannot apply 9% CIT to income from dividends, disposal of shares, share redemption, or in-kind contributions. The law provides a fixed 19% rate for these sources of income. If your company has both operating activities and capital revenues, you need to separate these two streams.
9% CIT vs. Estonian CIT
Estonian CIT and 9% CIT are two different taxation systems. With Estonian CIT, you don’t apply the 9% or 19% scale, as the tax arises upon profit distribution or specific events. Therefore, the decision between “classic” CIT and Estonian CIT should be preceded by an analysis of the company’s long-term strategy.
How to plan your company structure with 9% CIT in mind?
Planning for 9% CIT requires looking at the legal form, revenue model, and future development. It often pays to divide the business into several companies instead of accumulating all revenue in one. At Progress Holding, we analyze this with you right from the company’s incorporation.
Limited liability company as the basic CIT taxpayer
Limited liability companies (sp. z o.o.) most often use 9% CIT. For many foreign entrepreneurs, this is the basic tool for entering the Polish market. We jointly select the capital model, shareholder agreements, and method of profit distribution to optimize the overall level of taxes and contributions.
Dividing operations between several companies
If one company develops several business lines of different scales, it sometimes makes sense to separate them. This makes it easier to maintain small taxpayer status and not exceed the 2 million EUR revenue limit in one company. However, every such move requires an analysis of tax risk and service costs.
Progress Holding support in choosing a structure
At Progress Holding, we combine tax advisory with company registration and ongoing accounting. We can propose a structure where one company develops an IT project, another handles real estate, and another serves as a holding company. This allows your group to use 9% CIT and other reliefs more effectively.
What does it look like in practice? Progress Holding’s experience
Based on many analyses we conduct for limited liability companies and foreign entities, we see recurring patterns. The greatest tax savings are achieved by companies that plan for 9% CIT even before issuing their first invoices. Such a strategy allows for calmer discussions with banks and investors.
Our data: the most common mistakes with 9% vs 19% CIT
- lack of current monitoring of revenues in relation to the 2 million EUR limit,
- confusing small taxpayer status with the current revenue limit in the tax year,
- combining several large contracts in one company instead of structuring them separately,
- ignoring capital gains and calculating 9% CIT on the company’s entire income,
- trying to “fix” the structure for 9% CIT only after being notified of an audit.
How we work with clients on the CIT rate?
We start with a simple financial model of your company for 2–3 years. We check if you will maintain small taxpayer status and the 2 million EUR limit with your planned sales. Then we select the form of taxation, the distribution of revenues between companies, and the schedule for any reorganizations.
Why is it worth addressing the CIT rate before starting the business?
If you only plan your taxes after the first year of operation, some options will already be closed. A sensible decision at the start helps avoid costly transformations and tax uncertainty. At Progress Holding, we combine the company formation stage immediately with an analysis of 9% vs 19% CIT and other reliefs.
Frequently asked questions
Can a foreign shareholder in a limited liability company use 9% CIT?
Yes, the origin of the shareholders does not matter for the company’s CIT rate. What counts is the company’s registered office or management location and meeting the conditions for a small taxpayer and the 2 million EUR limit. That’s why many foreigners run limited liability companies in Poland using 9% CIT.
Can I apply 9% CIT only to part of my income?
Yes, 9% only applies to income from revenues other than capital gains. Income from capital gains is still taxed at 19%. You must clearly separate these sources in your records to calculate the tax correctly.
Does exceeding the 2 million EUR limit in one month mean losing 9% for the whole year?
Yes, if it turns out after the end of the year that revenues exceeded the 2 million EUR limit, you will tax the entire income for that year at 19%. During the year, you can calculate advance payments at 9%, but an adjustment will be necessary later. That’s why it’s important to monitor revenues on an ongoing basis, not just at the end of the year.
Can changing the tax year help maintain 9% CIT?
Changing the tax year is a tax planning tool, but it requires good analysis. Shifting the year can temporarily “spread” revenues between two periods, but it doesn’t change the 2 million EUR limits converted to PLN. Such actions should always be consulted with an advisor to avoid disputes with the authorities.
What if I’m on Estonian CIT and considering returning to classic 9% CIT?
Returning from Estonian CIT to the classic system is possible, but it involves settling the tax on retained profits. Only after returning can your company analyze the conditions for 9% CIT. Such a decision should stem from a long-term strategy for dividend payouts and investments.
Can Progress Holding calculate how much I will really save on 9% CIT?
Yes, we prepare tax simulations comparing 9% and 19% CIT for your company. We take into account revenue forecasts, costs, planned investments, and any other potential reliefs. This allows you to make a decision based on numbers, not general marketing slogans.
9% CIT can significantly reduce your company’s tax burdens, but it requires meeting clearly defined conditions and constant control of revenue limits. A well-planned legal and tax structure allows you to legally use the lower rate and, at the same time, sleep soundly during a potential audit. Need professional support? Contact us at Progress Holding at +48 603 232 418 or by email office@progressholding.pl.
