This article will answer the following questions:

• How has the draft law regulating top-up taxation in Poland changed?
• At what stage are the legislative works on the Polish act implementing the provisions of Pillar 2?

On 15 November 2024, the President of the Republic of Poland signed the Act of 6 November 2024 on top-up taxation of constituent entities of international and domestic groups. This completed the work on the implementation into the Polish legal system of the provisions of Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation of international groups of enterprises and large domestic groups in the Union (known as the Pillar 2 directive). 

Assumptions of the EU Pillar 2 directive

Let us recall that the Pillar 2 Directive introduces a set of rules that impose on large international and domestic capital groups that meet the appropriate conditions the obligation to pay a global minimum tax. 

Globally, it is estimated that as many as 140 countries will implement the Pillar 2 regulations, including Poland.

What versions of the draft law on the global top-up tax have been developed by the Polish legislator so far?

The first version of the draft act on top-up taxation of constituent entities of international and domestic groups appeared on the Government Legislation Centre website in April 2024. However, following public consultations and the review stage, many comments were made regarding the shape of the draft, which is why, over time, subsequent versions of the draft Polish act were created, which were intended not only to implement the provisions developed by the OECD as best as possible, but also to take into account the voices of Polish taxpayers.

Legislative status: do we already know the certain date for the implementation of the global minimum tax in Poland?

In September 2024, the bill implementing the provisions of the EU Pillar 2 directive was submitted to the Sejm (the lower house of the Polish parliament) for further work. Then, over the course of several weeks, some changes were introduced. At the beginning of November 2024, the bill was submitted to the Senate (the upper house), which did not introduce any amendments. The bill was therefore submitted for signature to the President of the Republic of Poland. The Head of State signed the bill on top-up taxation on 15 November 2024 and currently (as at 20 November 2024) the bill is awaiting publication in the Journal of Laws.

The provisions regulated by the Act will enter into force on 1 January 2025. The transitional provisions provide for the possibility of voluntary application of the Pillar 2 regulations with retroactive effect, from 1 January 2024.

Summary of changes in the act implementing Pillar 2 provisions

We wrote in detail about the modifications to the draft of the Polish act in the previous post in the series, but we would like to remind you about the most important changes that were included in the final version of the draft. 

The Polish Ministry of Finance has primarily indicated a catalogue of qualified taxes. Additionally, this catalogue has been supplemented in the justification for the draft act implementing the global minimum tax. 

The qualified taxes indicated by the Polish Ministry of Finance include, among others, CIT collected under general rules, withholding tax and income tax on unrealised profits. The justification for the act also indicates taxes that cannot be considered qualified, such as PIT and real estate tax.

The Ministry of Finance also introduced a change to the provisions on the so-called safe harbours. The final version of the act indicates that the 5-year exemption also covers the domestic top-up tax for the constituent entities of such groups whose ultimate parent entity is located in Poland. This means that – if the relevant conditions are met – an international group with a parent entity in Poland will not have to calculate both the global top-up tax and the domestic top-up tax.

The Polish ministry also changed the amounts due for issuing an opinion on top-up taxation and a security opinion on top-up taxation. In the current wording of the act, they amount to, respectively: up to PLN 15,000 of the initial fee and up to PLN 50,000 of the main fee for an opinion on top-up taxation and up to PLN 65,000 for a security opinion.

These are the main changes that distinguish the original bill from the final one. However, this does not mean that they are the only ones – you can find more about the changes in the bill in our article Pillar 2: summary of the changes introduced by the Polish Ministry of Finance. 

Preparing a company to implement the provisions of the Pillar 2 directive is a challenging process

We would like to point out that the implementation of the Pillar 2 directive regulations will probably be one of the most important and demanding changes introduced in Poland in the next tax year. 

The provisions in question introduce a number of new obligations for large international and domestic capital groups, the fulfilment of which will not be easy and will require a comprehensive approach from taxpayers, and perhaps even adjustment of the entire tax strategy to the new realities of doing business in Poland. 

It can be extremely useful to use the services of an experienced specialist who will help you through the entire process. If you have any questions or concerns, we encourage you to contact our experts.