Asset managers of EU and third country investment funds with income from Poland that is subject to Polish WHT should take note of the following revisions, applicable from 1 January 2026. For UCITS (and comparable third country funds), the changes imply a step towards proceduralizing WHT exemptions / reclaims. For Alternative Investment Funds – AIFs (closed-ended funds and special open-ended funds), the changes can lead to more complex WHT reclaim procedures.
Regulations on the CIT exemption for foreign investment funds have been amended with effect as of 1 January 2026.
The major changes continue to involve:
- extending the exemptions (both income-based and entity-based) onto funds from third countries,
- varying the exemption conditions to take into account the existence of internally managed funds in other jurisdictions,
- introducing another exemption condition allowing the exemption to be used by foreign investment funds from countries with respect to which there is a legal basis for the Polish tax administration to be able to obtain information about Polish residents' accounts with collective investment institutions,
- extending the Polish anti-abuse regulations with respect to funds enjoying income-based exemptions (which effectively are all funds other than UCITS).
But the enacted version has some variations in points 2 and 3 above.
Re. 1
This change is made to comply with the guidelines contained in CJEU's judgment in case C-190/12 Emerging Markets and endorse the practice of Polish tax authorities and courts where exemption has been granted to third country funds comparable to domestic funds.
The changes will also apply with respect to entity-based exemptions for foreign pension funds.
Re. 2
This change comes in the wake of CJEU's judgment of 27 February 2025 in case C-18/23.
The original wording of one of the conditions had been that, to qualify for the exemption, a fund must be managed by an entity authorised by the relevant financial supervision authority of its home country. This allowed Polish tax authorities to deny exemption to internally managed funds.
In accordance with the final enacted wording, in the case of foreign funds the exemption will be available as follows:
- if the fund is managed by an entity specifically authorised as such by the relevant financial supervision authority of its home country, or
- in the case of an internally managed collective investment institution, the exemption will be available to the institution authorised as a collective investment institution or as a manager of such institutions by the relevant financial supervision authority of its home country.
Re. 3
When proposed, the draft originally mentioned only that use of the exemption requires the existence of a legal basis for automatic exchange of information between Poland and the country where the taxpayer has its seat or management so that the head of Polish National Revenue Administration could obtain information on accounts held with collective investment institutions by individuals or entities with full tax liability in Poland.
This condition has been rephrased so that, as per the enacted version, the exemption applies to collective investment institutions with respect to which there is a legal basis for the relevant authority in Poland to use automatic exchange to obtain information on accounts held with those institutions, if the disclosure comprises the information set out in Article 34(1)(1) to 34(1)(3) of the Exchange of Tax Information with Other Countries Act of 9 March 2017 ("Reporting Law"), subject to Article 34(2) of that act.
Under Article 34(1)(1) to 34(1)(3) of the Reporting Law, the following information must be disclosed about reportable accounts:
- the name, address, jurisdiction of residence, TIN and date and place of birth (in the case of an individual) of each reportable person that is an account holder of the account and, in the case of an entity that is an account holder identified as being controlled by at least one controlling person that is a reportable person, the name, address, jurisdiction of residence, TIN of such entity and the name, address, jurisdiction of residence, TIN and date and place of birth of each such controlling person;
- the account number or its functional equivalent in the absence of an account number;
- the name, address and TIN (if any) of the reporting financial institution.
Article 34(2) of the Reporting Law lays down some exceptions to what information qualifies as reportable.
Re. 4
This is a proposal to extend the Targeted Anti-Abuse Rule, or TAAR, in Article 22c of the CIT Act. Previously TAAR was used to deny preferences in cases indicating abuse of PS or IR Directive exemptions. Now TAAR is proposed to be used for income-based exemptions which are generally designed for foreign investment funds other than UCITS (closed-ended funds and special open-ended funds operating in accordance with rules and restrictions applicable to close-ended funds).
In accordance with TAAR, income-based exemptions cannot be used if their use is:
- contrary, in the circumstances, to the object or purpose of the regulations, and
- the principal purpose or one of the principal purposes of the transaction(s) or some other operation(s), and the arrangement is artificial.
By Article 22c(2) of the CIT Act, an arrangement is not artificial (is genuine) if it is appropriate to conclude in the circumstances that a person acting reasonably and for lawful purposes would apply this arrangement largely for valid commercial reasons. The reasons referred to in the first sentence do not include the intended use of an exemption that is contrary to the object or purpose of its underlying regulations.
It is currently difficult to predict how tax authorities will practically assess on a case-by-case basis whether TAAR applies in the case of any income-based exemption for foreign investment funds.
CIT on (incl. foreign) banks increases
On 27 November 2025 the Polish President signed a law to amend the CIT Act and the Act on the Taxation of Certain Financial Institutions. The amendments increase fiscal burdens for only one industry, which puts their constitutionality in question. The new law applies to domestic banks, foreign banks, credit institutions, cooperative banks and so-called SKOK (Spółdzielcza Kasa Oszczędnościowo-Kredytowa, the Polish version of a savings and loans association or a credit union).
The CIT on banks will increase from 19% to 23%, except that for 2026 it will basically go up to 30% and will be 26% in 2027 (assuming the bank's tax year coincides with calendar year). Lower rates are imposed on cooperative banks and SKOK.
The new law also offers a reduction in the tax on certain financial institutions, or the so-called banking tax. The rate, which is now 0.0366%, will go down to 0,0329%, decreasing further to 0,0293% as of 2028. This reduction concerns only domestic banks, branches of foreign banks, credit institutions and SKOK (and does not apply to such institutions, as insurance or reinsurance undertakings).
The changes to corporate income tax on banks are scheduled to take effect as of 1 January 2026, while those affecting the banking tax will enter into force as of 1 January 2027.
