Estonian CIT in Poland, in plain English: no company tax until profit is paid out

Estonian CIT is an optional tax regime for a Polish sp. z o.o. (limited liability company). The company pays no corporate income tax (CIT) while it keeps its profit, and pays a flat 10% or 20% only when the profit leaves it, mainly as dividends. In exchange, it must meet strict conditions on who owns it, what it earns and whom it employs.

In Polish it is ryczałt od dochodów spółek (a flat-rate tax on company income), usually called estoński CIT.

How the tax works

Under the normal rules, a company pays CIT of 9% or 19% on its profit every year, whether it keeps the money or not. Under Estonian CIT, that yearly tax disappears. Tax is due only when profit:

• is paid out to shareholders as a dividend, or an advance on one;
• is used to cover losses from the years before Estonian CIT;
• leaves the company in a hidden way, or is spent on things unrelated to the business (see the hidden-profits section below).

The rate is 10% for a small taxpayer and for a company in its starting year. A small taxpayer had sales, VAT included, of up to 2,000,000 EUR in the previous year: 8,517,000 PLN for 2026. Everyone else pays 20%.

What the shareholder pays on top

You then pay the usual 19% personal income tax (PIT) on the dividend, but it is cut by 90% of the company’s tax if the company paid 10%, or by 70% if it paid 20%. Polish sources usually show the result on 100 PLN of profit paid out:

In the Estonian rows, the company’s tax comes on top of the 100 PLN dividend. Measured against all the profit used (110 or 120 PLN), the total is closer to 18% or 21%. Either way, it is lower than the normal route, and nothing is due on profit you leave in the company.

Example: your small company makes 200,000 PLN profit in 2026 and keeps all of it to grow. On normal CIT at 9% it owes 18,000 PLN. On Estonian CIT it owes nothing until it pays a dividend.

Who can use it

A company must meet all of these conditions at once:

• Shareholders are only people (natural persons), not other companies. They must not be founders or beneficiaries of a foundation or trust, except a Polish family foundation.
• Mostly active income. Less than 50% of last year’s revenue (VAT included) may come from passive sources: interest and loans, receivables, guarantees, copyright or patent rights (licences, royalties, selling the rights), selling financial instruments, or low-value deals with related parties. A new company meets this in its first Estonian year.
• Staff who are not shareholders. Either at least 3 full-time employees on employment contracts for at least 300 days a year, or monthly pay of at least 3× the average enterprise-sector wage to at least 3 people on other contracts, where the company withholds their PIT or ZUS (social security) contributions.
• No shares in other companies, investment funds or partnerships.
• No IFRS: it does not report under international accounting standards.
• Notice on time: it files ZAW-RD with the tax office by the end of the first month of its first Estonian year.

The wage benchmark is the enterprise-sector average from GUS (the national statistics office), profit bonuses included, for the third quarter of the year before the tax year starts. For a tax year starting on 1 January 2026 it is 8,854.61 PLN, so the “3×” test means at least 26,563.83 PLN of pay a month. Invoices from contractors who run their own businesses do not count, because the company withholds neither PIT nor ZUS on them.

Who cannot use it, or must wait

• Banks and other financial firms, lenders, and companies in liquidation or bankruptcy.
• Companies with a tax exemption from a special economic zone or the Polish Investment Zone.
• A company created by a merger or division, or one into which someone contributed an existing business worth more than 10,000 EUR, must wait: it is excluded for its first year and the next, at least 24 months.
• A company formed by transforming a JDG (a sole trader business) is not excluded. But if its first year is also its first Estonian year, it pays 19% CIT on the rise in value of its assets at the transformation, at once or in parts over up to 2 years.

The staff rule, year by year

This is the rule that stops most small owners. You, as a shareholder, never count as staff, even with an employment contract.

If you miss the staff or passive-income condition, you lose Estonian CIT at the end of that tax year. If you break the rule on owners, shares or IFRS, you lose it from the end of the year before, so the whole year is taxed the normal way. Either way, you can choose it again only after 3 tax years, and no sooner than 36 months after the year you lost it.

Hidden profits: the main trap

Ukryte zyski (hidden profits) are why Estonian CIT needs discipline. They are any benefit that reaches a shareholder or a related person other than as a dividend. The law lists, among others:

• a loan from the company to you (the whole amount, not just the interest), and interest the company pays on a loan from you;
• the difference from the market price in a deal between the company and you, your JDG or your family’s businesses;
• gifts and hospitality (reprezentacja) spending;
• profit used to raise the share capital.

Separately, expenses unrelated to the business are taxed at the same rates. Both are due by the 20th of the month after the payment. Two rules catch many owners:

• A company car. If it is also used privately, half of its costs count as a hidden profit or a non-business expense. If it is used only for business, none do, but the company must be able to prove that use.
• Your pay. Pay to you as an employee, board member or contractor on a civil-law contract is not a hidden profit up to a monthly cap: five times the average pay the company paid in the month before, and never more than five times the enterprise-sector average (8,854.61 PLN for 2026). Only the part above the cap is taxed.

Tip: keep every company cost with its invoice and a clear business reason. Komplet, our free Mac app, files each invoice into the right month and pairs it with the payment on your bank statement, so a payment with no document behind it stands out before your accountant asks.

Deadlines

A deadline that falls on a Saturday, Sunday or public holiday moves to the next working day.

Starting, renewing and leaving

• Starting during a year: you can, by closing the books at the end of the month before.
• Renewing: Estonian CIT runs for 4 years at a time and renews itself.
• Leaving: you can leave at the end of any tax year by saying so in the CIT-8E for your last Estonian year.
• Profit never paid out: after you leave, profit earned under Estonian CIT is still taxed, when it is paid out later, or all at once if you choose.

What changed in 2026, and what may change in 2027

In force in 2026. Since 1 July 2026, a company’s books in JPK format (the tax office’s standard electronic file) are due by the end of the 7th month after the tax year, no longer together with the yearly return. This applies to Estonian CIT companies too. Companies that file JPK_V7 VAT returns, monthly or quarterly, send their first books file, for 2026, by 31 July 2027. That is a Saturday, so in practice the deadline is 2 August 2027. Other companies start with their 2027 books. The rates and conditions above did not change in 2026.

Announced, not law. On 22 September 2026 the government adopted a bill that would change Estonian CIT from 1 January 2027. Reports say it would:

• pardon formal mistakes made when switching mid-year;
• define non-business expenses;
• let companies meet the staff condition with a mix of employment and civil-law contracts;
• change how profit paid out after leaving is taxed.

Reports disagree on whether switching during a year will still be possible. The bill still has to pass the Sejm (the lower house of parliament), the Senate and the President, so plan on today’s rules and ask your accountant before acting on it.

Is it worth it for a one-person company?

Usually not for long. The staff rule is the problem: from the second year a new company must hire, and hire again the year after. A company that exists to invoice your own work rarely wants three employees. Remember the other costs of a one-person company too, such as about 2,757 PLN a month of ZUS for a sole shareholder in 2026 (see ZUS for a sp. z o.o. owner).

It tends to pay off when:

• the company already has, or plans, real staff;
• you want to reinvest profit rather than take it home each year;
• the owners are people, not holding companies;
• your accountant is comfortable with the regime, because the books and the hidden-profit checks need more care. See what a sp. z o.o. costs to run.

What to do next

1. Check the owners, the passive-income share and the staff numbers against the lists above.
2. Work out whether you will keep profit in the company. If you take it all out each year, compare JDG or sp. z o.o. first.
3. If you are still setting up, read what a sp. z o.o. is and decide before the tax year starts.
4. File ZAW-RD by the end of the first month of your first Estonian year, and ask your accountant to set up the books for it.