The “hidden dividend” provision for 2027 is one of the most significant changes included in the draft amendment to tax regulations published by the Ministry of Finance. Officially, the goal of the changes is to tighten the tax system, but in practice, they may significantly impact popular business structures used by Polish entrepreneurs.
Below, we discuss the most important tax changes in 2027 and what they really mean for business owners.
The most significant proposed change concerns the so-called “hidden dividend.” If you are a shareholder in a limited liability company (sp. z o.o.) and also operate a sole proprietorship that issues invoices to that company, this arrangement could become very costly.
According to the project, the company will not include remuneration paid to a related individual for intangible services in its costs. This means double taxation: the company will pay CIT on the full income, and you, as a sole proprietorship, will pay tax on revenue. Instead of one layer of taxation, there will be two.
For companies operating under the "company plus sole proprietorship" model, this is a fundamental change that requires rethinking the entire structure.
Flat-Rate Tax 8.5%: The End of Higher Income Without Employees
The proposal stipulates that the 8.5% flat-rate will be available only for annual revenue up to 100,000 PLN. Once this amount is exceeded, the 15% rate applies, provided the taxpayer does not employ any workers. This change applies to both private rentals and services provided to related parties.
For property owners and entrepreneurs providing services to their own companies, this means higher taxation.
The bill introduces a requirement to hire employees as a condition for qualifying for the preferential 5% tax rate under the IP Box program. Those currently benefiting from this tax relief without employing staff will need to review their situation before 2027.
The bill also includes some positive changes. It provides for an amnesty for companies that failed to complete the necessary formalities upon entering Estonian CIT. In addition, it eases employment conditions. The bill will clarify the definition of hidden profits, which will make it easier to apply this form of taxation.
The direction seen in the project is clear: the ministry prefers companies with Estonian CIT with dividend payouts or structures with a family foundation, rather than a model where a sole proprietorship invoices its own company by a partner.
The changes are scheduled for January 1, 2027, which gives you time to prepare. However, these are not minor adjustments. If your structure is based on the “company plus sole proprietorship” model, it’s worth checking now how to adapt it. You can switch to the Estonian corporate income tax (CIT) system, consider setting up a family foundation, change your employment arrangement, or restructure your payout strategy.
The answer depends on your goals. It matters whether you plan to reinvest your profits, withdraw them regularly, sell the company, or pass it on to the next generation.
If you want to check how the planned changes will specifically affect your situation, we invite you to a free consultation.
Accounting, taxes, law, and finance don't have to take up your time. Let's talk about your business's needs and find the best solutions.
