Poland’s Limited Liability Company (Sp. z o.o.): A Tax-Efficient Structure

Establishing a Polish LLC (Sp. z o.o.) can offer attractive tax benefits, notably a 9% corporate income tax (CIT) rate and a 0% dividend tax when participation exemption criteria are met. However, navigating the Polish tax and accounting landscape necessitates specific compliance measures:

1. Accounting Services

Maintaining an electronic accounting ledger is mandatory for Polish LLCs. This entails utilizing accounting software capable of generating specific reports, making foreign software often unsuitable.

Key points regarding accounting obligations:

• Electronic Record-Keeping: All accounting records must be maintained electronically.
• Specific Reporting: The accounting software must be able to generate reports required by Polish tax and accounting regulations.
• Certified Software: Consider using accounting software certified by the Polish Ministry of Finance to ensure compliance.
• Data Retention: Accounting records must be stored for 5 years.

2. Timely Tax Payments

• Monthly CIT Advances: Monthly CIT advance payments are generally required based on estimated taxable income. Accurate calculation and timely payment of these advances are essential to avoid penalties.
• VAT Compliance: VAT-registered LLCs must file monthly electronic VAT returns (JPK_VAT) using compatible accounting software.
• Additional Taxes: Depending on your business activities, there might be other tax obligations like excise tax or real estate tax.

3. Administrative Requests

LLCs must promptly respond to administrative information requests from entities like the Statistical Office or the Polish National Bank. These may include:

• Statistical Surveys: Providing information on your company’s operations for statistical purposes.
• Balance of Payments Reporting: Reporting certain cross-border transactions to the National Bank of Poland.
• Other Requests: Responding to ad-hoc requests for information from various government agencies.

4. HR Compliance

Employing staff triggers additional obligations related to labor law, social security contributions, workplace safety, and personal income tax (PIT) withholding and reporting.

5. Year-End Reporting

End-of-year compliance involves:

• Financial Statement Preparation: Preparing annual financial statements in accordance with Polish accounting standards.
• Shareholder Approval: Obtaining shareholder approval for the financial statements through a formal resolution.
• Filing Requirements: Submitting the financial statements and other required documents to the National Court Register (KRS).

How We Can Help

Our team of English-speaking professionals will handle all your tax, accounting, and legal advisory needs, as well as routine administrative tasks. We offer comprehensive services to ensure your Polish LLC remains compliant and operates smoothly, allowing you to focus on your core business activities.

Contact us today to discuss how we can assist your Polish LLC.

Please note that this article provides general information and is not intended as a substitute for professional tax or legal advice. Consult a qualified professional for advice tailored to your specific situation.

Author:

Jerzy Gaweł
Partner – Tax Advisor