This article will answer the following questions:

• What is the group exemption from the minimum income tax?
• How was the possibility of choosing the composition of a group of companies previously interpreted in Poland?
• Why was the previous approach of the Head of the National Revenue Administration Information beneficial for taxpayers?
• How should the composition of groups of companies be determined now?

The first settlement of the minimum income tax is over now: in 2024, taxpayers began (pursuant to Article 24(ca) of the Polish CIT Act) to analyse whether they are subject to the domestic minimum tax. The obligation to pay it applied to entities that incurred a loss in 2024 or their profitability ratio failed to exceed 2%. However, meeting this condition is not the only factor that should be taken into account when settling accounts with the Polish taxman – at the very beginning of the process, it is crucial to correctly verify whether the company can claim any of the exemptions from the minimum tax provided for in the Polish law. What was the stance taken by the Head of the National Revenue Administration Information regarding the exemption that applies to taxpayers being part of a group of companies?

Group exemption – the essence of regulations indicating who is subject to the minimum tax

The exemption from Article 24(ca)(14)(6) of the Polish CIT Act states that taxpayers who are part of a group of at least two companies may be excluded from the obligation to settle and pay the minimum income tax, if, within this group:

• one company holds at least 75% of shares (directly or indirectly) in the other companies throughout the entire fiscal year,
• all entities have the same fiscal year,
• the total profitability ratio (the ratio of income to operating revenues) of the companies exceeds 2%.

The group exemption mechanism for the minimum tax is intended to curb unfair taxation of groups of companies that operate efficiently, but which, when analysed individually, might not meet the requirements set for profitability threshold.

Previous approach of the Head of the National Revenue Administration Information – flexibility in choosing the group’s composition

Initially, the Head of the National Revenue Administration Information took a view that the taxpayer could freely determine the composition of the group with which they settled for the purposes of the exemption referred to in Article 24(ca)(14)(6) of the Polish CIT Act.

In the individual ruling of 12 December 2024, reference number 0111-KDIB2-1.4010.514.2024.1.AR, the Head of the National Revenue Administration Information indicated that: the above provision does not require the taxpayer to create a group with all companies in relation to which the condition of having 75% of shares is met. Taxpayers are free to choose from which companies – meeting the conditions specified in Article 24(ca)(14)(6) of the Polish CIT Act – to create a group and which to leave “outside the group”.

This approach was surprisingly beneficial for taxpayers and allowed for flexible tax risk management, depending on the financial standings of individual entities in the group.

The new stance taken by the Head of the National Revenue Administration Information puts an end to discretion and complicates minimum tax settlements

In the individual ruling of 8 April 2025, reference number 0114-KDIP2-2.4010.60.2025.2.SJ, the Head of the National Revenue Administration Information presented a completely different approach, one that is unfavourable for taxpayers. It was considered that the taxpayer does not have the right to choose which companies meeting the conditions stipulated in the CIT Act will be included in the group for the purposes of the analysed exemption.

The ruling stated that: There are no grounds for accepting the stance in the light of which it would be possible to choose the composition of the group subject to exemption. Exemption from the minimum income tax under Article 24(ca)(14)(6) of the CIT Act applies to all companies of the group meeting the exemption criteria.

The new interpretation means that taxpayers of the minimum tax are required to indicate in their settlement all those companies in which the parent company holds (directly or indirectly) at least 75% of shares and which share the same fiscal year. It is no longer possible to apply the mechanism of group exemption from the minimum income tax to exclude some selected entities.

What are the implications of the new stance on the minimum tax group exemption for tax settlements?

The change in the approach of the Head of the National Revenue Administration Information has significant practical consequences. The major challenges that taxpayers operating in Poland will have to face include:

• the need to take into account the full composition of the group when calculating the total profitability ratio,
• the potential risk of losing the right to exemption (even if just one of the covered companies reduces the profitability of the entire group below the 2% threshold),
• the obligation to amend CIT and pay the minimum tax for 2024 (including interest).

The new ruling of the National Revenue Administration Information also sets the bar higher for taxpayers in terms of data consolidation and transparency of the group structure.

To what extent the group exemption from domestic minimum tax remains unchanged?

Fortunately, there has been no change as to another important element of the group exemption mechanism – the Head of the National Revenue Administration Information still consistently indicates in the rulings that the parent company does not have to have its registered office in Poland and may be a foreign entity. Moreover, the authority emphasises that if the legislator's intention was to limit this status to domestic entities only, this would be explicitly stated in the provisions of the CIT Act.

This means that the parent company that links Polish entities within a group may be a foreign company, e.g. with its registered office in Bulgaria or the United States (provided that the criteria of holding 75% of shares and having the same fiscal year are met).

However, taxpayers must remember that only Polish companies can settle their taxes as a group – and claim the exemption from minimum tax in Poland envisaged in the CIT Act. This is a key restriction that is still in force and affects the method of identifying the group eligible for the exemption.

The stance taken by the authorities as to the acceptability of a foreign parent company remains favourable, especially for international capital groups. Otherwise, structures with headquarters outside Poland would be completely excluded from the possibility of taking advantage of the preferences.

In case of questions or doubts as to how to settle the minimum tax – both in the context of determining the composition of the group and calculating the profitability ratio – we encourage you to contact our tax advisors.