Author: kancelaria

Since August we have been observing heightened inspection activity by the National Labour Inspectorate in the area of B2B cooperation models. In parallel, inspection activities are being carried out across the country by ZUS and the tax authorities, aimed at verifying relationships based on B2B and civil law contracts.

The key question today is not whether the B2B model is permissible, but whether it will be able to withstand an inspection by PIP, ZUS or the tax authorities.

In response to these challenges, a new safeguarding tool has appeared. The National Labour Inspectorate has begun issuing individual interpretations.

 

An overview of the first PIP interpretations

Date	Industry	Outcome	3 key factors
28.07.2026	Sales / marketing / business development	Favourable – no employment relationship	freedom as to the place and time of performing the services absence of ongoing instructions and supervision possibility of substitution and a focus on the commercial result
29.07.2026	IT industry / software development	Favourable – no employment relationship	possibility of refusing to accept assignments absence of subordination as to the manner, place and time of work contractual liability and the possibility of providing services to other entities
29.07.2026	IT industry / Project Manager	Favourable – no employment relationship	absence of employer powers over the team independent organisation of project work responsibility for the project result and contractual risk
03.08.2026	Temporary work agency (warehouse, shop and production work)	Unfavourable – in fact a temporary employment relationship	obligation to perform work at the place and time indicated by the client the simple nature of the work and subordination to ongoing instructions illusory substitution not excluding personal performance of the work
05.08.2026	Temporary work agency (analogous model)	Unfavourable – in fact a temporary employment relationship	direction by the user client work at a specified place and time economic risk on the agency’s side
03.08.2026	Transport of children with disabilities – driver	Unfavourable – employment relationship	performance of work throughout the school year use of the vehicle and organisation provided by the entity absence of economic risk on the provider’s side
05.08.2026	Transport of children with disabilities – carer	Unfavourable – employment relationship	obligation to perform the work personally fixed place and time of performing the duties integration into the organisational structure of the entity providing the public service
17.08.2026	Retail and bakery production (students)	Unfavourable – employment relationship despite flexible hours	ongoing tasks assigned by the employer participation in the core sales and production process the absence of autonomy in determining how the entrusted activities are carried out is more significant than freedom to choose when the tasks are performed

 

Key conclusions from the interpretations issued so far

The first decisions show a very clear interpretative trend on PIP’s part, consistent with the inspectorate’s earlier announcements:

The greatest chances of withstanding scrutiny are enjoyed by B2B models based on:

• the provider’s autonomy,
• responsibility for the result,
• the ability to organise one’s own work
• and the bearing of genuine economic risk

(often found, for example, in IT and professional services).

 

The greatest risk of challenge arises where the provider:

• carries out tasks according to superiors’ directions,
• works at a specified place and time
• and does not bear the economic risk of the activity

(often found, for example, where simple, routine work is entrusted).

 

What a PIP individual interpretation is and why to use it

An individual interpretation is a written assessment by the Chief Labour Inspector as to whether the legal relationship described in the application constitutes an employment relationship within the meaning of Article 22 § 1 of the Labour Code. The institution is introduced by Article 14b of the Act on the National Labour Inspectorate, and applications may be submitted from 8 July 2026.

An application may concern both a model already operating within the company and a future event, that is a structure that is only being planned. This is significant for organisations preparing to remodel their cooperation with contractors and wishing to know the authority’s position before implementing changes.

Only the entity entrusting the work may apply for an interpretation, as indicated in Article 13(1) to (6) of the Act on the National Labour Inspectorate: an employer, an entrepreneur or another organisational unit for which the work is or was performed. A person cooperating under a B2B model has no standing to submit an application in their own case.

The issuance of an interpretation is subject to a fee of PLN 40 for each separate set of facts or future event presented in the application. An interpretation is issued without undue delay, no later than within 30 days of receipt of a complete application. If the application has formal deficiencies or proof of payment has not been attached, the applicant has 7 days to supplement it, and once that deadline has passed without effect the application is left unexamined.

The commercial rationale for this tool follows from how the inspectorate’s powers have changed. From 8 July 2026, a district labour inspector may establish the existence of an employment relationship by administrative decision, without a prior court ruling. The burden of procedural initiative has therefore shifted to the entrepreneur. An individual interpretation works in the opposite direction: it makes it possible to obtain the authority’s position earlier, under controlled conditions, instead of learning it only in the course of an inspection.

An interpretation is not binding on the applicant, who is not obliged to follow it. It is, however, binding on the authorities of the National Labour Inspectorate. An entity that has followed the interpretation it received cannot be subjected to sanctions within the scope covered by the decision.

 

What a PIP interpretation does not resolve

The protection under Article 14b operates within the limits of the National Labour Inspectorate’s powers and solely in relation to the set of facts described in the application. An interpretation does not close off contribution or tax risk and does not exclude the possibility of an inspection being carried out.

Below are the limitations that in practice determine whether an application makes sense in a specific organisation.

• An interpretation does not block an inspection. PIP retains the right to examine the actual nature of the cooperation.
• The protection falls away where the facts diverge. If the inspector establishes that practice departs from the description contained in the application, the interpretation ceases to protect. A model described more favourably than it actually looks not only fails to provide protection, but itself becomes material in the case.
• An interpretation is not binding on ZUS or the National Revenue Administration. Both authorities conduct their own proceedings under their own provisions. Outstanding contributions are not a sanction but a liability, so protection against sanctions does not cover them.
• An issued interpretation is forwarded to ZUS and KAS. A company should take into account that its position and the description of its model reach authorities that may conduct separate proceedings.
• It does not cover matters already under way. The Chief Labour Inspector will not issue an interpretation on elements that, as at the date the application is submitted, are the subject of PIP or ZUS proceedings. Once an inspection has begun, it is too late to ask.
• It does not replace a review of operational practice. An application describes a model. If the day-to-day organisation of work departs from that description, the value of the interpretation is illusory. The order should be the reverse: first a review of the documentation and the realities of the cooperation, then the application.

 

Frequently asked questions (FAQ)

 

Who may submit an application for a PIP individual interpretation?

Only the entity entrusting the work, listed in Article 13(1) to (6) of the Act on the National Labour Inspectorate. A person providing services under a B2B model or a mandate contract may not submit an application in their own case.

 

How much does an application for an interpretation to the Chief Labour Inspector cost?

PLN 40. If the application covers more than one separate set of facts or future event, the fee is payable for each of them.

 

How long does one wait for an interpretation?

Without undue delay, no later than 30 days from the date of receipt of a complete application together with proof of payment.

 

Does a PIP interpretation protect against ZUS and the tax office?

Not automatically. An interpretation is binding on PIP authorities. ZUS and KAS conduct their own proceedings and are not bound by the Chief Labour Inspector’s position, but an issued interpretation is forwarded to them.

 

Can an unfavourable interpretation be appealed against?

An interpretation is issued in the form of a decision against which a means of appeal to the court is available, on the terms set out in the Code of Civil Procedure. The decision contains instructions on how and by when it is to be lodged.

 

Are the interpretations issued published?

Yes, after the removal of data identifying the applicant and other entities indicated in their content. This means that subsequent decisions will gradually build up a picture of PIP’s interpretative line, including for companies that have not themselves submitted an application.
Is a PIP interpretation the right solution for your company? Would you like to check whether the B2B model operating in your organisation is resilient to inspection by PIP, ZUS and the tax authorities? Get in touch with us!

 

 

An inspection by the National Labour Inspectorate concerning the way cooperation is carried out under a B2B model is not solely an HR issue. The inspector analyses the actual manner in which the work or services are performed and the circumstances of the cooperation, which in practice involves the management board, the legal department, HR, finance and operational managers all at once. The greatest threat is not the inspector’s presence at the company as such, but the organisational chaos that arises when each unit answers questions on its own and without coordination.

Bearing in mind that the new provisions granting labour inspectors the power to issue decisions establishing the existence of an employment relationship have applied in practice since July 2026, it must be assumed that inspection practice is only taking shape. As at the date of publication, there is no settled line of case law relating to labour inspectors’ new powers. The amendment did not de facto change the rules for conducting inspection activities (that is, the way evidence is gathered, witnesses are questioned, etc.), but above all broadened the catalogue of possible decisions concluding the proceedings – what changed were the effects of the inspector’s findings and their powers once the inspection is complete. This article therefore treats a PIP inspection not as a one-off “visit from an official”, but as a risk management project that may initiate a sequence of actions involving ZUS and the National Revenue Administration as well.

 

National Labour Inspectorate inspections in 2026 – what did the new PIP B2B reform change?

The PIP reform did not create a new type of inspection – it changed how an inspection may end. The National Labour Inspectorate was already previously entitled to inspect the way work is performed and compliance with labour law provisions, including where the cooperation was carried out on the basis of civil law contracts or in the form of business activity. What is new is that such an inspection may now lead to the commencement of administrative proceedings concluded by a decision establishing the existence of an employment relationship, on the basis of Article 11 of the Act on the National Labour Inspectorate in the wording established by the Act of 11 March 2026 (Journal of Laws of 2026, item 473).

Until now, if an inspector concluded that the cooperation infringed labour law standards, they could issue representations, issue orders within the scope of their statutory powers and – above all – bring an action before the court to establish the existence of an employment relationship, or join proceedings already under way. An inspection is now no longer merely an information-gathering stage – it may become the beginning of a multi-stage process involving ZUS and KAS as well.

It is worth emphasising that a PIP B2B inspection may be commenced both as a result of a complaint by a cooperating person and on the initiative of the National Labour Inspectorate, including as part of inspection plans and on the basis of information obtained by the inspectorate (including from sources such as data provided by ZUS or the tax office). An entrepreneur should therefore not assume that the absence of a conflict with a contractor eliminates the risk of an inspection.

 

Preparing for a PIP inspection – who within the company’s structures is responsible for dialogue with the inspector?

Good organisational practice is to designate one person to coordinate contact with the authority – it is a mistake to assume that responsibility for the inspection rests solely with HR. In the case of inspections of B2B models, each department holds a different fragment of the information, and a lack of coordination very easily leads to contradictory explanations being provided.

The coordinating person need not be a member of the management board, but should have appropriate authority and the ability to contact the individual departments quickly. The role of the individual organisational units usually looks as follows:

• HR is responsible for the documentation concerning the cooperation, internal policies and contact with the persons performing the services.
• The legal department analyses the legal basis for the inspection activities and the scope of the entrepreneur’s obligations arising from the Act on the National Labour Inspectorate, and also prepares the entrepreneur’s positions.
• The finance / accounting department assesses the financial risks arising from the inspection and keeps in mind the potential impact of the PIP inspection on tax and contribution obligations and risks.
• The management board takes strategic decisions and approves the manner in which dialogue with the authority is conducted.
• Operational managers are often the most important source of information about the actual manner in which the cooperation is carried out – their explanations may be of material significance in establishing how the cooperation was in fact performed.

All participants in the inspection should be familiar with a common communication strategy. This is not about obstructing the inspection, but about ensuring consistency in the information provided.

 

The inspection procedure step by step – how to safeguard daily business?

A well-prepared organisation is able to go through a PIP inspection and at the same time carry on projects as normal, provided that individual responsibilities have been defined in advance. The successive stages of the procedure are set out below:

• Formally receive the inspector and verify their authorisation and the scope of the inspection before handing over any documents.
• Designate a person responsible for ongoing contact with the authority and for keeping a register of all documents provided.
• Make copies of all documentation provided to the inspector and document the course of the inspection – this later makes it possible to reconstruct the evidence and prepare any objections to the inspection report.
• Limit the number of people in direct contact with the inspector – the more employees who provide explanations on their own, the greater the risk of inconsistency.
• Do not subordinate current operations entirely to the inspection – if individual responsibilities are defined in advance, the company can carry on projects as normal while the inspection is under way.

It is very good practice to appoint and work with a professional representative (a legal counsel, an advocate or a tax adviser) specialising in representing entrepreneurs during inspections. They will help develop the best strategy for conduct during the inspection and enforce it throughout the case. Thanks to their professional experience, an external representative is usually able to assess “which way” the inspection activities are heading and to advise which documents and explanations should be submitted.

 

Which documents may an inspector demand, and what goes beyond their powers in a PIP B2B inspection?

An inspector may demand documents relevant to establishing whether the cooperation was carried out in conditions characteristic of an employment relationship, on the basis of the inspection powers set out in Article 23 of the Act on the National Labour Inspectorate. In practice this concerns above all:

• B2B contracts and their amendments,
• invoices and cooperation schedules,
• project documentation,
• internal rules applicable to providers,
• business correspondence,
• documents showing how the work is organised.

This does not, however, mean that the authority may demand any documents whatsoever in the entrepreneur’s possession – the scope of the request should remain connected with the subject matter of the inspection being conducted. The entrepreneur is obliged to enable the inspection to be carried out, but at the same time has the right to expect that all activities will be performed within the limits of the inspector’s statutory powers, including the limits arising from the provisions of Chapter 5 of the Entrepreneurs’ Law, which governs restrictions on inspections of business activity.

It is also worth bearing in mind business secrets. The mere fact that a document is covered by business secrecy does not preclude the possibility of showing it to the inspector, but the entrepreneur should mark such documents appropriately and control the scope of the information provided.

 

The post-inspection report and what next? When the case lands on another institution’s desk

Signing the post-inspection report is not the end of the matter – from the perspective of legal and tax risk it may, unfortunately, be only the beginning. Once the inspection activities have been concluded, the inspected entity has the right to raise substantiated objections to the findings contained in the report.

This is an extremely important stage, because it is precisely then that the inspector’s findings of fact can be challenged, overlooked evidence pointed out, or an incorrect assessment of the material gathered highlighted. Disregarding this opportunity may make it more difficult to defend one’s position in subsequent proceedings.

If the inspection findings point to the existence of an employment relationship, the matter may move to the administrative stage conducted by PIP. In parallel or subsequently, an interest in the case may also be shown by ZUS – as regards coverage by social insurance and the amount of contributions, which we discuss in more detail in the article on [appealing against a ZUS decision following the reclassification of a B2B contract] – and, depending on the circumstances, by the National Revenue Administration authorities (the tax office or the customs and fiscal office).

From the management board’s perspective, the most important mistake is passively waiting to see how events unfold. A far better solution is to carry out an internal audit of all B2B cooperation models before the whole process has been concluded – we describe it in the article on [an urgent remedial audit of B2B models]. This makes it possible not only to prepare arguments in the specific case, but also to identify similar risks in the remaining relationships with contractors and to reduce the likelihood of further inspections or disputes with other authorities.

 

Frequently asked questions

 

Is a PIP inspection of B2B contracts a new type of inspection introduced by the reform?

No. PIP was able to inspect the way civil law contracts were performed previously as well. The reform changed above all how such an inspection may end – it may now lead to an administrative decision establishing the existence of an employment relationship.

 

Is the HR department alone responsible for a PIP inspection at a company?

It should not be. With inspections of B2B models, an inspection very quickly involves the management board, the legal department, HR, finance and operational managers. It is recommended that one person be designated to coordinate the entire process. It is also worth using the services of a professional representative (a legal counsel, an advocate, a tax adviser).

 

Which documents may a PIP inspector demand in an inspection of B2B contracts?

Documents relevant to establishing whether the cooperation was carried out in conditions characteristic of an employment relationship – in particular B2B contracts, invoices, cooperation schedules, project documentation and business correspondence. The scope of the request must remain connected with the subject matter of the inspection.

 

May a PIP inspection be commenced without a prior conflict with a contractor?

Yes. An inspection may be commenced both as a result of a complaint by a cooperating person and on the initiative of the National Labour Inspectorate, including as part of inspection plans and on the basis of information obtained by the inspectorate.

 

Sources

• Act of 13 April 2007 on the National Labour Inspectorate, consolidated text (Journal of Laws of 2024, item 1712), Articles 11, 23 and 31
• Act of 11 March 2026 amending the Act on the National Labour Inspectorate and certain other acts (Journal of Laws of 2026, item 473)
• Act of 17 November 1964 – Code of Civil Procedure, consolidated text (Journal of Laws of 2026, item 468), Article 63(1)
• Act of 6 March 2018 – Entrepreneurs’ Law, consolidated text (Journal of Laws of 2025, item 1480), Chapter 5
• Ministry of Family, Labour and Social Policy, “Reform of the National Labour Inspectorate”

The new B2B inspection rules require greater operational discipline from companies. Below you will find how an inspection works in practice, what the risks are and how to safeguard your cooperation model.

 

B2B inspections after 8 July 2026: how PIP assesses actual cooperation and which elements most often lead to reclassification?

After 8 July 2026, inspections of B2B cooperation entered an entirely new phase. The National Labour Inspectorate gained tools allowing it to assess more quickly and more effectively whether a relationship with a contractor is genuinely business in nature or displays the features of employment. In practice this means moving away from analysing the wording of the contract alone towards examining the actual manner in which the services are performed, and therefore the level of independence, the organisation of work and the way instructions are given.

For companies using B2B, this is the moment at which putting processes in order and verifying risk becomes necessary. PIP’s new powers, including the ability to issue an administrative decision on the existence of an employment relationship, mean that the cooperation model must be not only well described, but also consistent with day-to-day operational practice.

 

What changed after 8 July 2026? Key facts for management boards and HR

After 8 July 2026, companies using the B2B model must operate under entirely new supervisory conditions. The reform of the National Labour Inspectorate not only broadened the scope of inspections, but above all changed the way cooperation with contractors is assessed. This means that the risks associated with B2B are more tangible today, and the responses of the supervisory authorities faster and more effective than ever before.

 

An administrative decision on the existence of an employment relationship

From 8 July 2026, a district labour inspector may independently establish that B2B cooperation displays the features of an employment relationship. An administrative decision replaces lengthy court proceedings, which significantly shortens the response time and increases the risk of immediate financial consequences. This is a fundamental change, because for the first time an inspection authority may directly determine the nature of the engagement.

 

PIP’s two-stage mode of operation

The new provisions introduced a procedure in which the inspector first issues an order to remedy infringements, indicating the elements of the cooperation requiring correction. Only a failure to respond on the company’s part opens the way to an administrative decision being issued. This model is preventive in nature, but it requires organisations to put processes and documentation in order quickly.

 

Remote inspections and electronic document flow

PIP may conduct inspections entirely remotely: analysing documents online, questioning the parties by videoconference and issuing electronic inspection reports. This increases inspectors’ availability and allows more frequent inspections, especially in companies operating in a hybrid or distributed model.

 

Joint risk analysis: PIP, ZUS and KAS

Following the reform, state institutions exchange data on employment, contributions and cooperation models. As a result, companies are selected for inspection on the basis of risk analysis rather than solely on the basis of reports. Consequently, organisations with a large number of contractors or with repetitive settlement patterns may appear more frequently on the list of entities to be verified.

 

A 12-month adjustment period (until 8 July 2027)

The provisions envisage a one-year period in which companies may put their B2B cooperation model in order without the risk of financial sanctions. Inspections still take place, but their purpose is to identify irregularities and allow them to be remedied. This is the time for a process audit, for standardising documentation and for making sure that the way services are performed is consistent with the wording of the contracts.

 

How does PIP assess B2B cooperation? Practice counts, not the contract

After 8 July 2026, the National Labour Inspectorate assesses B2B cooperation primarily through the lens of the actual manner in which the services are performed, rather than the wording of the contract. This means that even a correctly drafted contract does not protect the company if day-to-day practice resembles an employment relationship. Inspectors analyse the facts, including the organisation of work, the way instructions are given, the level of the contractor’s independence and the nature of the remuneration, and then compare them with the criteria arising from Article 22 of the Labour Code.

 

Subordination and the way work is managed

One of the key elements of the assessment is whether the contractor acts independently or is subject to the company’s ongoing direction. Inspectors pay attention to who decides how tasks are performed, who sets priorities, who monitors progress, and whether the contractor can organise their own work independently. If the process resembles typical employee supervision, this is a strong risk signal.

 

Time and place of performance of the services

PIP analyses whether the contractor is free to choose their working hours and place of work, or whether they operate within a fixed schedule imposed by the company. Fixed hours, mandatory presence in the office or an obligation to report attendance may indicate features of employment. What is crucial is whether the contractor actually enjoys independence, and not merely whether it is written into the contract.

 

Personal performance of the services and the possibility of substitution

Inspectors examine whether the contractor may entrust the performance of tasks to another person, which is a natural element of business activity. If the cooperation is based on mandatory, personal performance of the services and the company does not allow substitutes, the relationship may be assessed as one of employment. PIP focuses on practice, not merely on the wording of the contract.

 

The nature of the remuneration and economic risk

In a B2B model the provider should bear economic risk, and their remuneration should reflect the nature of the services. Fixed, lump-sum rates paid regardless of the results of the work, an absence of costs on the contractor’s side or a lack of responsibility for the result may indicate that the self-employment is a sham. Inspectors also analyse whether the contractor provides services to other entities or is in fact tied to a single company only.

 

Integration with the team and access to benefits

PIP also assesses the degree to which the contractor is integrated into the organisational structures, including participation in team meetings, use of employee benefits, involvement in HR processes and onboarding. The more the cooperation resembles the standard functioning of an employee within the company, the greater the risk of the B2B model being challenged.

 

Consistency between documentation and operational practice

Inspectors compare the wording of the contract with the actual manner in which the services are performed. If the documentation indicates independence but practice indicates subordination, PIP treats the actual state of affairs as decisive. This means that companies must take care not only over the content of their contracts, but also over the consistency of their operational processes with the B2B model.

 

What does a B2B inspection look like in practice?

Inspections of B2B cooperation after 8 July 2026 are more dynamic, faster and based on an analysis of the actual conditions in which the services are performed. PIP inspectors use both traditional tools and new remote mechanisms, and their work is supported by data from ZUS and KAS. In practice this means that an inspection may begin unexpectedly, take several forms and cover both documents and the day-to-day organisation of work.

 

Forms of inspection: on-site, remote and hybrid

An inspection may take place at the company’s premises, entirely online or in a mixed model. In the case of remote inspections, inspectors use videoconferencing, electronic document flow and screen sharing, which allows them to analyse materials in real time. This mode is particularly common in companies operating in a hybrid or distributed model.

 

The scope of documents and information PIP may demand

An inspector has the right to demand:

• B2B contracts and amendments,
• work schedules, reports and timesheets,
• project documentation,
• correspondence concerning the manner in which tasks are performed,
• internal rules, procedures and instructions in force at the company,
• information on remuneration and the manner of settlement,
• data concerning the contractor’s other clients (where available).

PIP analyses not only formal documents, but also operational materials that show what the cooperation looks like from day to day.

 

Interviews with contractors and employees

Inspectors conduct interviews with the people involved in the cooperation, both contractors and the managers supervising their work. The questions concern, among other things, the way instructions are given, the organisation of working time, the scope of responsibility, the possibility of substitution and the level of independence. This is one of the key elements of an inspection, because it makes it possible to establish the actual nature of the relationship.

 

Analysis of operational practice

PIP compares the wording of the contract with the actual manner in which the services are performed. If the documentation indicates independence but practice indicates subordination, the inspector treats the actual state of affairs as decisive. The matters analysed include:

• the way tasks are delegated,
• the contractor’s participation in team meetings,
• access to tools and systems,
• use of benefits,
• the obligation to report work results.

It is precisely this part of the inspection that most often determines how the cooperation is assessed.

 

An order to remedy infringements

If the inspector finds irregularities, they may issue an order to remedy them. The document indicates the specific elements of the cooperation that need to be corrected, for example the way instructions are given, the organisation of working time or the scope of the contractor’s responsibility. The order is not yet a sanction, but it constitutes a formal warning.

 

An administrative decision on the existence of an employment relationship

If the company does not implement the changes indicated in the order, the district inspector may issue an administrative decision establishing the existence of an employment relationship. This is the most severe consequence of an inspection, because the decision takes immediate effect and entails an obligation to make tax and contribution corrections as well as organisational changes.

 

An individual interpretation from PIP

Companies may apply for an individual interpretation, which protects them against sanctions provided that the actual state of affairs corresponds to the one described in the application. This is a preventive tool, particularly useful during the adjustment period running until 8 July 2027.

 

What are the consequences of B2B cooperation being challenged?

Classifying B2B cooperation as an employment relationship is one of the most severe outcomes of a PIP inspection. Following the changes in the legislation, an inspector’s decision may take immediate effect through the imposition of immediate enforceability. This means rapid financial burdens, the need to reorganise processes and legal risks that may affect the stability of the entire engagement model.

 

Financial consequences: outstanding contributions, taxes and top-up payments

Moreover, reclassification may result in the need to pay public law liabilities, including:

• ZUS contributions,
• PIT advance payments.

And, in addition, the need to:

• top up employee entitlements, such as holiday pay equivalents, overtime supplements or other entitlements arising from the Labour Code,
• correct payroll documentation and ZUS filings.

In practice this often means corrections covering many months, which may place a significant burden on the organisation’s budget.

 

Organisational consequences: changes to the working model and team structures

Reclassification forces the cooperation model to be adjusted. The company must:

• employ the person concerned under an employment contract or change the way the services are provided,
• implement full employment processes: working time records, occupational health and safety rules, holidays, breaks, overtime,
• reorganise teams, if the model used to date was based on a large number of contractors,
• adapt tools, systems and procedures to labour law requirements.

In companies using B2B on a large scale, this may mean rebuilding the entire operating model.

 

Legal consequences: management board liability and the risk of disputes

An inspector’s decision may trigger further proceedings:

• liability of management board members for infringements of employment provisions,
• fiscal penal proceedings connected with incorrect tax settlements,
• claims by contractors, who may pursue employee entitlements for the entire period of cooperation,
• the need to correct HR and payroll documentation.

This is an area that simultaneously involves the legal department, HR, accounting and the management board.

 

Reputational consequences: loss of trust and destabilisation of cooperation

Reclassification may also affect the company’s image:

• it weakens contractors’ trust,
• it makes recruitment in the B2B model more difficult,
• it affects relations with business partners,
• it forces crisis communication within the organisation.

In industries based on flexibility and specialist services, this is felt particularly keenly.

 

Which companies are most exposed?

The risk of B2B cooperation being challenged is not spread evenly across all organisations. PIP focuses primarily on companies in which the model of cooperation with contractors is widely used and day-to-day practice may resemble an employment relationship. What matters is not only the number of people on B2B, but also the way work is organised, the structure of teams and the nature of the services provided.

 

Companies with a large number of contractors

Organisations that base a significant part of their operations on B2B cooperation are naturally more visible in risk analyses. This applies both to large project teams and to companies that have replaced employment positions with contracts over the years. The greater the scale of the cooperation, the greater the likelihood that PIP will want to verify whether the model complies with the law.

 

Industries with repetitive working patterns

The highest risk concerns sectors in which contractors work in a manner close to that of employees: at fixed hours, within teams, under ongoing managerial supervision. These are above all:

• IT and software development,
• marketing and the creative industry,
• e-commerce and logistics,
• shared services centres (SSC/BPO),
• manufacturing and industry,
• technology and design companies.

In these sectors the line between a service and employment can be especially thin.

 

Organisations with extensive reporting structures

Companies that require contractors to report working time, attend regular meetings, use internal tools or comply with procedures typical of employment are more exposed to inspection. PIP analyses whether the contractor actually operates as an independent entity or is integrated into the organisational structure.

 

Entities offering contractors employee benefits

The risk increases where contractors use benefits typical of employment, such as private medical care, sports cards, internal training or company events. Inspectors treat this as a signal that the company treats the contractor as an employee rather than as an independent service provider.

 

Companies with lump-sum, fixed remuneration

Fixed, recurring remuneration, independent of the results of the work or the scope of the services, is one of the elements that may suggest that self-employment is a sham. PIP pays attention to whether the contractor bears economic risk or receives remuneration in a manner typical of employment.

 

How to safeguard B2B cooperation? A practical plan for companies

Effectively safeguarding B2B cooperation requires a process-based approach. A correctly drafted contract is not enough, because what is crucial is that the way the services are performed genuinely reflects a business model rather than an employment one. The plan below sets out measures that genuinely reduce the risk of the cooperation being challenged by PIP.

 

1. Audit your contracts and operational practice

The audit should cover both documents and the day-to-day organisation of work. In practice this means analysing:

• the content of the B2B contracts, the scopes of services and the rules on responsibility,
• the way tasks are delegated and communication with contractors is handled,
• schedules, reports, timesheets and project documentation,
• the remuneration structure and settlement rules,
• contractors’ integration with the team and internal processes.

The aim is to establish whether operational practice is consistent with the B2B model.

 

2. Design a cooperation model consistent with the law and with PIP’s practice

On the basis of the audit, the company should implement a model that minimises the risk of reclassification. This includes, among other things:

• clearly defining the scope of services and the deliverables,
• ensuring a genuine possibility of substitution,
• avoiding fixed working hours and mandatory presence in the office,
• emphasising the contractor’s independence within operational processes,
• adjusting the remuneration structure so that it reflects the nature of the services rather than an employment pay scheme.

 

3. Introduce procedures governing B2B cooperation

Procedures are among the most important pieces of evidence during a PIP inspection. They should cover:

• instructions for managers on communication and delegating tasks,
• rules on onboarding contractors,
• guidelines on reporting and settlements,
• documentation confirming the provider’s independence (e.g. acceptance protocols, declarations).

Well-prepared procedures prevent practice from “drifting apart” from the wording of the contracts.

 

4. Train managers and teams

Most errors in the B2B model stem from a lack of operational awareness. Training should cover:

• the differences between B2B and employment,
• the rules on giving instructions,
• the elements that may lead to reclassification,
• managers’ responsibility for keeping practice consistent with the documentation.

This is a key element, because it is precisely the day-to-day actions of teams that PIP most often analyses.

 

5. Monitor compliance and update documentation

The B2B model requires ongoing oversight. Companies should:

• regularly verify the consistency of practice with the documentation,
• update contracts and procedures,
• respond to changes in the legislation,
• consult advisers on atypical cases.

Continuous monitoring makes it possible to maintain consistency between theory and practice.

 

6. Consider applying for an individual interpretation from PIP

An individual interpretation can confirm that a given cooperation model complies with the law. This is particularly useful in the case of:

• large teams of contractors,
• high-value projects,
• atypical cooperation models,
• industries with a heightened risk of inspection.

An interpretation protects the company provided that the actual state of affairs corresponds to the description in the application.

 

How will companies feel the new inspection rules?

The new B2B inspection rules force companies to change their approach to cooperation with contractors. A model that for years functioned mainly as a flexible alternative to employment now requires considerably greater operational discipline. Organisations must ensure consistency between documentation and day-to-day practice, clearly define the limits of providers’ independence and manage risk consciously. In practice this means the need for continuous process monitoring, greater responsibility on the part of managers and a readiness to respond quickly to signals of non-compliance. Companies that treat this area strategically may continue to use B2B, though no longer intuitively, but in a conscious and orderly way.

 

How does ALTO Advisory help companies through the changes?

ALTO Advisory supports companies in putting B2B cooperation in order from both a legal and an operational perspective. Our team of advisers helps carry out a risk audit, prepare a safe cooperation model, develop procedures for managers and put in place documentation that genuinely protects the company during an inspection. Ongoing support is also an important element, such as consultations on atypical cases, updating contracts and preparing the organisation for the new supervisory obligations. This allows companies to use B2B in a way consistent with PIP’s current practice.

 

Summary

The changes in the way B2B cooperation is inspected mean that companies need a more conscious and orderly approach to their relationships with contractors. PIP today assesses above all practice rather than the wording of contracts, which is why organisations must ensure consistency of processes, clear rules of cooperation and appropriate preparation of managers. The B2B model can still be safe and effective, but it requires greater operational discipline and continuous risk monitoring. Properly designed procedures, regular audits and expert support allow companies to make use of B2B flexibility without fear of the consequences of an inspection.

 

 

A labour inspector’s decision establishing the existence of an employment relationship is not the same as a decision of the Social Insurance Institution concerning coverage by social insurance and the amount of contributions. These are two separate proceedings conducted under different statutes and by different authorities, although findings made by the inspector may constitute significant evidence in proceedings conducted by ZUS.

The provisions granting labour inspectors the power to issue decisions establishing the existence of an employment relationship have only just entered into force, so, as at July 2026, the practice of applying them is of course only taking shape. There is as yet no settled case law relating to the new regulations, which is why the statutory provisions and the existing case law of the Supreme Court concerning the conditions for the existence of an employment relationship retain fundamental significance.

This means that, in analysing the effects of the reform, one must rely above all on three pillars: the provisions of the new act on the National Labour Inspectorate (“PIP”), the Act on the Social Insurance System (“ZUS”), and the existing case law of the Supreme Court concerning the establishment of the existence of an employment relationship. The last of these will, paradoxically, be of the greatest significance in the coming years, because the reform did not change the definition of an employment relationship, only the authority and the procedure for establishing it. All the criteria developed by the Supreme Court for distinguishing genuine self-employment from a sham B2B contract remain applicable. Nor can one disregard the definition of business activity in the tax statutes, or the practice of the tax authorities and administrative courts in relation to B2B. All these sources form the ecosystem for operating safely in the sphere of B2B contracts.

 

The very title of this article, however, requires explanation, because it is very easy to create the mistaken impression that a PIP decision automatically leads to a decision being issued by ZUS. That is not the case. We are dealing with two separate sets of proceedings conducted by two different administrative authorities:

• The National Labour Inspectorate (PIP) makes findings concerning the existence of an employment relationship within the scope arising from the applicable provisions.
• ZUS independently assesses whether a given person is covered by compulsory social insurance and what the amount of the contributions due is.

A PIP decision therefore does not replace a ZUS decision and does not in itself yet give rise to contribution arrears, but for ZUS it constitutes extremely significant evidence. If ZUS obtains information about findings made by the National Labour Inspectorate, it may use the material gathered as evidence in the proceedings it conducts, but it still has an obligation to establish the facts independently and to carry out its own assessment of the evidence in accordance with the principle of free assessment of evidence. This is precisely why the PIP reform is of such great financial significance, even though it formally does not change the social insurance provisions.

 

From a PIP inspection report to a ZUS assessment decision – the financial domino mechanism

Findings made by a labour inspector, contained in the inspection report and in any administrative decision, do not in themselves give rise to contribution arrears. They may, however, be used by ZUS as evidence leading to the issuance of its own decision concerning coverage by social insurance and the amount of contributions. Only a ZUS decision may result in an obligation to pay outstanding contributions together with interest.

In public debate, the reform is most often presented as a change concerning labour law. From the perspective of a company’s management board, however, the greatest problem is not the obligation to conclude an employment contract, but the financial consequences that may emerge many months later.

This mechanism resembles a domino effect. A PIP inspection leads to the gathering of extensive evidence concerning the way the cooperation was carried out. The inspector then issues a decision concerning the existence of an employment relationship, and the information gathered may be used by ZUS in commencing its own proceedings.

One thing is worth emphasising very strongly: a PIP decision is not binding on ZUS in the formal sense. The Social Insurance Institution is obliged to establish the facts independently and to issue its own decision. This does not mean, however, that a PIP decision is without significance; in practice it will be one of the most important pieces of evidence in the entire proceedings.

Only a ZUS decision may lead to contribution arrears being established, interest being charged and further enforcement measures being initiated. From the point of view of an entrepreneur, and above all from the point of view of the management board and the finance director, it is precisely this moment that marks the beginning of real financial risk, which may materialise not on an individual scale, but across the entire group of contractors cooperating with the company.

It may be added in passing only that the financial risk will materialise not only in ZUS arrears, which are the subject of this article, but also in potential tax arrears, as described in more detail below.

 

ZUS proceedings on the redefinition of a B2B contract – how to protect the company against security over its assets?

An entrepreneur has the greatest influence on the outcome of the case not in court, but already at the stage of the investigative proceedings conducted by ZUS – that is where it is worth presenting material confirming the contractor’s genuine independence.

Most entrepreneurs focus on the final ZUS decision, whereas the most important stage of the proceedings takes place much earlier. That stage is the investigative proceedings.

In the course of the proceedings, ZUS is obliged to gather and consider all the evidence exhaustively. The authority may demand documents, question the parties and witnesses, and use other means of evidence provided for in the Code of Administrative Procedure, applied accordingly on the basis of the Act on the Social Insurance System. In practice the scope of the evidence is very broad, and it is precisely at this stage that the entrepreneur has the greatest opportunity to influence the outcome of the case.

From the perspective of managing the company’s liquidity, it is a mistake to treat the investigative proceedings as a formality and to postpone the arguments until the court stage. If coherent material confirming the contractor’s genuine independence is presented as early as this stage, there is a chance of concluding the case without an unfavourable decision being issued, which directly limits the financial risk for the company. Only after the investigative proceedings have been concluded does ZUS issue a decision concerning coverage by social insurance and the amount of contributions due.

A separate issue, crucial from the CFO’s perspective, is security over assets. The Social Insurance Institution may apply security for the performance of a liability only in the cases provided for in the provisions of the Act on the Social Insurance System and the Tax Ordinance applied accordingly. This requires demonstrating that the statutory conditions exist, in particular a justified concern that a future liability will not be performed. An entrepreneur’s aim should therefore be not so much to “avoid security” as to limit the risk of its being applied, through active participation in the proceedings and by demonstrating the company’s stable financial position.

 

Appealing against a ZUS decision step by step – deadlines and formal requirements in the fight for the company’s finances

An appeal against a ZUS decision is filed with the regional court, via the ZUS unit, within one month of service of the decision. Below is the full procedure step by step:

1. Check the date of service of the decision – the deadline for the appeal runs from that date.
2. Observe the one-month deadline – as a rule, the appeal must be filed within one month of service of the decision. Filing an appeal after the deadline may result in its rejection, unless the conditions provided for in the provisions that allow an appeal to be examined despite the deadline having been missed are met.
3. Direct the appeal to the competent regional court – the labour and social insurance division. An appeal against a ZUS decision is not filed with the President of ZUS or with any other administrative authority.
4. File the appeal via the ZUS unit that issued the decision – it is that unit which forwards it to the court.
5. Formulate specific pleas and indicate the provisions infringed, rather than merely stating in general terms that you disagree with the decision.
6. Present your own version of the facts together with the appropriate applications for evidence to be taken.
7. Assemble documents confirming how the cooperation was organised – in B2B cases the practice of the cooperation is more significant than the content of the signed contract itself.

 

Key pleas and arguments – how to defend a B2B contract effectively against redefinition as an employment relationship?

Entrepreneurs very often focus on showing that the parties deliberately chose the B2B model. From the court’s point of view, however, this is not a decisive argument – the objective circumstances in which the cooperation was carried out are far more significant. The strongest line of argument should demonstrate the entrepreneur’s genuine independence, in particular that the contractor:

• organised the manner of performing the services itself,
• bore the economic risk,
• invested its own funds,
• was responsible for the result of its work,
• could achieve either a profit or a loss,
• carried on business activity in its own name and at its own risk, and the fact that it also provided services to other entities may constitute an additional argument in favour of the entrepreneur’s independence, although it is not a condition for carrying on business activity,
• was not subject to the ongoing instructions of superiors and was not integrated into the enterprise’s organisational structure on the same terms as full-time employees.

 

The most common formal errors in appeals, which open the way for officials to collect contributions

The most common error is by no means missing the deadline for filing the appeal, although that of course has serious consequences. The most frequently encountered causes of an unfavourable outcome include:

• basing the entire line of argument solely on the content of the contract, even though ZUS and the courts examine above all the actual manner in which the cooperation was carried out,
• a passive stance at the stage of the investigative proceedings and postponing arguments until the court stage,
• omitting economic evidence – invoices, business correspondence, project documentation or evidence of bearing economic risk, which in B2B cases are often more significant than the contract itself.

 

A ZUS decision as a green light for a tax audit – how to stop losses escalating?

A ZUS decision does not automatically commence a tax audit, but in practice it may prompt the National Revenue Administration authorities to take an interest in the case.

It cannot be said that a ZUS decision automatically results in a tax audit being commenced, because the provisions do not provide for such a mechanism. In practice, a ZUS decision may prompt the National Revenue Administration authorities to take an interest in the case, but the provisions do not provide for the automatic commencement of a tax or customs and fiscal audit on that ground alone. Every set of tax proceedings requires a separate legal basis and its own findings of fact. If ZUS concludes that the cooperation was in reality an employment relationship, questions also arise as to the correctness of the tax settlements made by both parties.

The scope of the potential tax consequences will, however, depend on the specific cooperation model. In individual cases, issues may arise concerning PIT withholding agent obligations, the treatment of tax-deductible costs or VAT consequences. There is no single universal tax scenario for every B2B reclassification.

Effective risk management should not be limited to the appeal against the ZUS decision alone. For the management board and the finance director, it is far more important to prepare, in parallel, a strategy covering labour law, social insurance and taxes. Only such coordinated action makes it possible to limit the risk of multi-year disputes and of an accumulation of liabilities towards various state authorities. It is precisely this multidisciplinary nature of the problem that distinguishes an ordinary dispute with ZUS from a genuine legal and financial crisis within a business.

 

FAQ – Frequently asked questions

 

Does a PIP decision reclassifying a B2B contract automatically mean contribution arrears at ZUS?

No. A PIP decision and a ZUS decision are two separate sets of proceedings. A PIP decision is not binding on ZUS and does not replace its decision, but it constitutes significant evidence for ZUS in establishing whether an obligation to provide social insurance coverage has arisen.

 

How much time is there to appeal against a ZUS decision?

As a rule, the appeal must be filed within one month of service of the decision. Filing an appeal after the deadline may result in its rejection.

 

With which authority is an appeal against a ZUS decision filed?

The appeal is filed with the competent regional court, the labour and social insurance division, via the ZUS unit that issued the decision. It is not filed with the President of ZUS or with any other administrative authority.

 

Does a ZUS decision establishing an obligation to be covered by social insurance following a challenge to the B2B model lead to a tax audit?

Not automatically – the provisions do not provide for such a mechanism. In practice, however, a ZUS decision may prompt the National Revenue Administration authorities to take an interest in the case, especially as regards PIT withholding agent obligations and VAT settlements, with each set of tax proceedings requiring a separate legal basis and its own findings of fact.

 

When may ZUS establish security over a company’s assets in such proceedings?

Only where there is a real concern that the performance of a future liability will be hindered or impossible. Security is not applied automatically in every case – active participation in the investigative proceedings and demonstrating the company’s stable financial position limits that risk.

 

Sources

• Act of 11 March 2026 amending the Act on the National Labour Inspectorate and certain other acts (Journal of Laws of 2026, item 473) – sejm.gov.pl
• Act of 17 November 1964 – Code of Civil Procedure, consolidated text (Journal of Laws of 2026, item 468), Article 477(9) § 1 and § 3 – sejm.gov.pl
• Act of 13 October 1998 on the Social Insurance System, consolidated text (Journal of Laws of 2026, item 199), Article 83 – sejm.gov.pl
• Act of 26 June 1974 – Labour Code, consolidated text (Journal of Laws of 2025, item 277), Article 22 § 1 – sejm.gov.pl
• Ministry of Family, Labour and Social Policy, “Reform of the National Labour Inspectorate” – pl

 

Combining the R&D relief with IP Box is permissible and does not require choosing one of the two preferences. Each concerns a different element of the tax settlement, because the research and development relief reduces the tax base by the costs of the work, while IP Box allows income from the commercialisation of the intellectual property right created to be taxed at a rate of 5%. In practice, therefore, the risk does not concern the right to combine the two solutions as such, but the quality of the documentation.

What does using the R&D relief and IP Box at the same time involve?

Applying the R&D relief and IP Box simultaneously means that the taxpayer deducts the eligible costs of research and development work and then applies the 5% rate to the income from the qualified intellectual property right created as a result of that work.

The difference comes down to what each of the preferences relates to. The R&D relief, governed by Article 18d of the CIT Act and Article 26e of the PIT Act, covers costs. IP Box, that is Article 24d of the CIT Act and Article 30ca of the PIT Act, covers income. The preferences therefore relate to two different stages of activity and do not overlap.

Since 1 January 2022, Article 24d(9a) of the CIT Act has additionally been in force, together with its counterpart in Article 30ca(9a) of the PIT Act. The provision allows eligible costs that led to the creation, development or improvement of a qualified right to be deducted from the income derived from that right. This is currently the strongest basis for combining the two solutions, because it follows directly from the statute and not solely from interpretation.

Who can combine the research and development relief with IP Box?

Both preferences are available to CIT and PIT taxpayers that carry on research and development activity and derive income from a qualified intellectual property right created within that activity. Legal form is irrelevant here, so this applies both to a limited liability company and to a sole proprietorship.

In practice they are most frequently used by IT companies and software houses, because copyright in a computer program falls within the statutory catalogue of qualified intellectual property rights. The situation is similar in the games industry, where the subject of development work may be both the first version of a product and its subsequent modules and functionalities.

Meeting the conditions for one of the preferences does not, however, determine that the conditions for the other are met. The authority assesses each of them separately, on the basis of a distinct set of criteria.

It is also worth monitoring changes in the legislation. Draft proposals restricting access to IP Box for the smallest taxpayers have appeared before, and their legislative fate has proved variable.

How, step by step, to account for R&D and IP Box in relation to a single project?

Accounting for both preferences within one project requires three steps performed in a specific order: identifying the R&D activity, calculating the eligible costs, and calculating the income covered by the 5% rate.

Step 1: Identifying R&D activity and the creation of qualified IP

The starting point is establishing that the work satisfies the statutory definition of research and development activity, that is that it is creative in nature and carried out systematically, and that its result is a qualified intellectual property right.

For technology companies this most often means a computer program as the qualified IP, protected by copyright. At this stage it is worth describing each project separately: what problem it solved, what the creative element consisted in, and what the result of the work was. Interpretative practice indicates that development activity does not end at the moment the first version of a product is created, and that its subsequent development stages may also satisfy the statutory criteria, provided they do not amount to routine and periodic changes.

Step 2: Calculating the eligible costs (R&D relief)

The second step is to establish which expenses fall within the catalogue of eligible costs set out in Article 18d(2)-(3) of the CIT Act. The catalogue is closed, so not every cost connected with the project is deductible.

The least doubt is usually raised by the remuneration of the persons carrying out the work, together with social security contributions, in the part corresponding to their involvement in R&D activity. More disputes concern indirect expenses. In the ruling of 23 September 2024 (ref. 0114-KDIP2-1.4010.344.2024.3.PP), the Director of the National Revenue Information Service confirmed the possibility of using both preferences while at the same time narrowing the catalogue of eligible costs, among other things in relation to part of the expenditure on a car, licences, subscriptions and accounting and advisory services.

Step 3: Calculating IP Box income taking the nexus ratio into account

The third step is to establish the income from the qualified right and multiply it by the nexus ratio. Nexus is a proportion showing what part of the work on a given right the taxpayer performed itself and what part it purchased from others. The more it did itself, the greater the part of the income that can be covered by the 5% rate.

The formula, set out in Article 24d(4) of the CIT Act, compares the costs of work carried out directly by the taxpayer with the costs outsourced to external entities and with expenditure on the purchase of a ready-made right. The last of these operates least favourably, and the result may not exceed 1. The calculation is carried out separately for each qualified right.

Financial benefits – by how much does the effective tax rate actually fall?

The IP Box preference reduces the rate from 19% or 9% to 5% in relation to qualified income. The actual effective tax rate depends, however, on what part of the income passes the nexus test, and not on the nominal difference between the rates.

The scale of the benefit therefore depends on the structure of the project. For a taxpayer carrying out work almost exclusively with its own team, the nexus ratio may be close to 1, in which case almost all of the income from the qualified right is subject to the 5% rate. For a taxpayer relying largely on subcontractors, only part of the income will be covered by the preference, and the remaining part will continue to be taxed under the general rules. By way of illustration: with a nexus ratio of 0.6 and a basic rate of 19%, the blended rate on income from the qualified right is 10.6%, because 60% of the income is subject to the 5% rate and the remaining 40% to the general rules.

Added to this is the effect of the R&D relief, which under Article 24d(9a) of the CIT Act may also reduce income taxed at the 5% rate. A separate issue remains capital groups covered by the global minimum tax, where the effective rate is determined at the level of the entire jurisdiction rather than of an individual company. The overall benefit therefore has to be calculated individually, on the data for the specific tax year.

The most common errors and risks in applying both preferences in parallel

The most common error is not the combination of the preferences itself, but treating remuneration for services as income from a qualified intellectual property right. The 5% rate applies solely to income from qualified IP, and not to the entire remuneration obtained in connection with research and development activity.

The order matters here. First a qualified right must come into existence, and then the taxpayer must derive income from that very right, in one of the forms indicated in the statute. This distinction was highlighted by the Provincial Administrative Court in Szczecin in its judgment of 25 February 2026 (ref. I SA/Sz 574/25).

The other typical risks are the incorrect allocation of costs to individual rights, errors in calculating the nexus ratio, and too broad an understanding of creative activity. A separate question, still giving rise to disputes, is the permissibility of recognising the same cost twice, that is in a deduction from income from qualified IP and, in parallel, from income taxed under the general rules. The tax authorities have approached this question differently from the administrative courts, which is why it is worth considering an application for an individual tax ruling in this respect.

How to prepare safe tax records for R&D and IP Box?

Safe records are records that make it possible to reconstruct the entire settlement path: from the specific work, through the costs, to the income allocated to an individual qualified right. Gaps in the records are the most frequent reason for a settlement being challenged.

In practice, the IP Box records and the R&D relief records should together demonstrate:

• which projects and tasks constituted research and development activity,
• which costs were recognised as eligible under the R&D relief,
• which qualified intellectual property rights arose as a result of that work,
• what revenues and costs are attributable to each of those rights,
• how the nexus ratio was calculated for each right.

The records are best kept on an ongoing basis, in parallel with the projects, rather than reconstructed after the end of the tax year. Reconstruction in hindsight is more difficult evidentially and usually no longer allows a missing description of the work to be supplied.

How ALTO Advisory supports the settlement of the R&D relief and IP Box in Poland

Combining both preferences is feasible, but each project and each qualified right has to be assessed separately. ALTO’s tax advisers help technology companies through this process: from a review of projects, through calculations, to the preparation of documentation.

It is worth turning to an adviser for support if:

• you are applying both preferences for the first time and want to confirm the classification of the work,
• part of the work is carried out by subcontractors or related entities, which affects the level of the nexus ratio,
• the settlement covers several qualified rights to which revenues and costs have to be allocated,
• the records were created late or do not cover all of the required elements,
• you are considering an application for an individual tax ruling on a question where the authorities’ practice is not uniform.

Sources

• Act of 15 February 1992 on Corporate Income Tax, Article 18d, Article 24d(4) and Article 24d(9a) (ISAP, isap.sejm.gov.pl).
• Act of 26 July 1991 on Personal Income Tax, Article 26e and Article 30ca(9a) (ISAP, isap.sejm.gov.pl).
• Individual tax ruling of the Director of the National Revenue Information Service of 23 September 2024, ref. 0114-KDIP2-1.4010.344.2024.3.PP (Eureka database, eureka.mf.gov.pl).
• Judgment of the Provincial Administrative Court in Szczecin of 25 February 2026, ref. I SA/Sz 574/25 (Central Database of Administrative Court Rulings, orzeczenia.nsa.gov.pl).

In recent months, several judgments have appeared in the case law of the provincial administrative courts that may cause concern among taxpayers benefiting from the R&D relief. In these rulings, the courts devoted considerably more attention to documenting research and development activity than had previously been the case.

Does this mean that taxpayers should prepare for new, more stringent documentation obligations? In our assessment – no. These judgments do, however, constitute an important signal that proper documentation of R&D activity may play a key role in the event of a dispute with the tax authorities.

 

Increasingly high court expectations regarding R&D documentation

Recently, two rulings of the Provincial Administrative Court in Poznań deserve particular attention – of 10 February 2026 (ref. I SA/Po 683/25) and of 24 April 2026 (ref. I SA/Po 277/26), as well as the judgment of the Provincial Administrative Court in Łódź of 17 June 2025 (ref. I SA/Łd 208/25). Although they were delivered against different factual backgrounds, all of them point to a markedly more stringent approach to assessing documentation of research and development activity.

It follows from the reasoning of these rulings that the courts expect taxpayers in particular to:

• document the course of the work in a manner allowing its systematic character to be demonstrated, rather than merely presenting the final results of the project,
• demonstrate the objective of the project, the technical or research problem identified and the method adopted to solve it, together with a description of the difficulties and risks encountered,
• present evidence confirming the actual course of the R&D work,
• demonstrate that the documentation was not prepared solely for the purposes of the tax proceedings, but reflects the way the projects were conducted while they were being carried out,
• prove the creative character of the work carried out, going beyond the use of available technologies and standard industry knowledge.

The rulings analysed therefore show that the courts attach ever greater importance not only to the result of the work itself, but also to the possibility of reconstructing the entire process leading to its achievement. The question therefore arises whether all these expectations find support in the applicable provisions.

 

What do the provisions actually say?

An analysis of the most recent case law leads to a fundamental question: do the applicable provisions in fact impose on taxpayers an obligation to maintain documentation to the extent expected by some administrative courts?

In our assessment – no. The provisions on the R&D relief require the taxpayer to demonstrate that the activity carried out meets the statutory conditions for research and development activity, but they do not specify how this is to be done.

The provisions governing the R&D relief do not contain a catalogue of documents that a taxpayer should hold in order to benefit from the preference. The legislator does not use terms such as “project card”, “schedule” or “project implementation report”. Nor does it specify the required manner of documenting working time or the course of the individual project stages.

The only documentation obligation arising directly from the provisions is the separation of the costs of research and development activity within the accounting records maintained (Article 9(1b) of the CIT Act).

This does not, however, mean that the taxpayer need not have evidence confirming that R&D activity is being carried out. It only means that the statute does not impose its form.

 

An obligation to demonstrate circumstances is not the same as an obligation to maintain specific documentation

This distinction also follows from the provisions of the Tax Ordinance. Under Article 180 § 1 of the Tax Ordinance, anything that may contribute to clarifying the case and is not contrary to law is to be admitted as evidence. In turn, under Article 191 of the Tax Ordinance, the tax authority assesses the entirety of the evidence gathered.

The provisions do not give priority to particular types of documents, nor do they make entitlement to the relief conditional on holding specific project documentation. The fulfilment of the conditions for R&D activity may be demonstrated by various means of evidence – from technical documentation, through project correspondence, test results and research protocols, to documents functioning within the enterprise independently of the R&D relief.

It is undoubtedly the taxpayer that bears the burden of demonstrating that it carries on research and development activity, incurs eligible costs connected with that activity and maintains separate records allowing them to be identified. The legislator has not, however, determined how these obligations are to be fulfilled. This means that the taxpayer may use various means of evidence, provided that together they allow the statutory conditions to be shown as met.

In this context, equating the obligation to prove that the conditions for R&D activity have been met with an obligation to maintain documentation in a specific form raises material doubts.

 

Interpretative and judicial practice to date

Attention was initially focused on the obligation to maintain separate records of eligible costs arising from Article 9(1b) of the CIT Act. Both the administrative courts and the tax authorities consistently took the view that this provision imposes on the taxpayer an obligation to separate the costs of R&D activity, while at the same time leaving it free to decide how to fulfil that obligation.

The Provincial Administrative Court in Olsztyn, in its judgment of 15 January 2025 (ref. I SA/Ol 451/24), indicated that the accounting records should make it possible to determine precisely the amount of the eligible costs and the period to which they relate. The Supreme Administrative Court, in turn, in its judgment of 19 December 2023 (ref. II FSK 1415/22), emphasised that the legislator has not specified the manner of separating the costs of R&D activity, leaving taxpayers free to choose solutions allowing their correct identification.

The Director of the National Revenue Information Service has for years presented the same position. In the ruling of 2 June 2025 (ref. 0111-KDIB1-3.4010.204.2025.2.JG) it indicated that the provisions do not specify the form of cost separation or minimum requirements for the records maintained. The ruling of 14 March 2024 (ref. 0114-KDIP2-1.4010.75.2024.1.AZ), in turn, emphasised taxpayers’ autonomy in choosing the manner of separating costs, while the ruling of 24 June 2024 (ref. 0114-KDIP2-1.4010.186.2024.4.AZ) confirmed that the obligation arising from Article 9(1b) of the CIT Act may also be fulfilled by maintaining auxiliary records in the form of Excel spreadsheets.

The tax authorities consider the documenting of the course of research and development activity itself far less frequently. In this respect, guidance can be found primarily in the tax explanations of the Minister of Finance concerning IP Box of 15 July 2019. The Minister indicated that the records of an R&D project should include in particular a description of the project, its start and end dates, a list of the persons involved in carrying it out and a summary of the work performed, assigned to specific team members. As an example of how to document employee involvement, the maintenance of working time records, for instance in a spreadsheet, was indicated.

Interpretative practice takes a similar shape. An analysis of individual tax rulings leads to the conclusion that the tax authorities view the maintenance of R&D project cards positively as an element of documenting research and development activity. At the same time, it is difficult to find decisions from which it would follow that maintaining them constitutes an obligation arising from the provisions. Project cards are most often described by the applicants themselves as an organisational tool they use, and the Director of the National Revenue Information Service accepts such a manner of documentation as an element of the factual circumstances presented, without deriving from the provisions an obligation to maintain documentation in that form.

The case law, the rulings of the Director of the National Revenue Information Service and the Minister of Finance’s explanations therefore all lead to a common conclusion. The legislator requires the taxpayer to demonstrate that it carries on research and development activity, incurs eligible costs and maintains separate records allowing them to be identified, but it does not impose a single model for documenting these circumstances. What is of key importance is the ability to demonstrate the link between the costs incurred and the R&D activity, and not the maintenance of documentation according to a single, statutorily prescribed template.

 

Maintaining documentation on an ongoing basis

Notably, one of the recent rulings (I SA/Łd 208/25) put forward the view that there is an obligation to maintain documentation for the purposes of the R&D relief on an ongoing basis. This position does not, however, follow from the provisions. Moreover, the tax acts allow a CIT return to be corrected and the R&D relief to be claimed retrospectively, which in practice is a common way of recovering overpaid tax. It is therefore difficult to accept that a taxpayer would be obliged to maintain documentation on an ongoing basis, given that the legislator has not introduced such a requirement and at the same time has provided for the possibility of benefiting from the tax preference at a later date.

 

Summary

The most recent case law of the provincial administrative courts shows that documenting R&D activity will play an increasingly important role in tax disputes. This does not, however, mean the introduction of new documentation obligations. What remains crucial is gathering evidence allowing it to be demonstrated that research and development activity is being carried out, and correctly separating the eligible costs. From a practical point of view, it is worth ensuring that documentation is created on an ongoing basis and makes it possible to reconstruct the course of the work and to link the costs incurred with specific R&D projects.

The PPWR (Packaging and Packaging Waste Regulation) governs the design, labelling and placing on the market of packaging throughout the European Union. From 12 August 2026, some of its provisions apply directly, without any need for transposition into Polish law. We explain who PPWR applies to, which obligations have already entered into force and which are still to come, and how to prepare your company for them.

 

Would you like to check where to begin your PPWR preparations? Ask us about the PPWR Scanner and take advantage of an expert assessment prepared by our ESG team. We will help you identify obligations, potential risks and areas requiring action in connection with the new PPWR requirements.

 

What PPWR is and why it replaces the previous directive

PPWR stands for the Packaging and Packaging Waste Regulation, that is Regulation (EU) 2025/40 of the European Parliament and of the Council on packaging and packaging waste. Unlike the earlier Directive 94/62/EC, which it replaces, PPWR applies directly in all Member States, with no need for transposition into national law.

This distinction has practical significance. A directive set out objectives, and each state determined for itself in its own legislation how to achieve them, which led to differences between national markets. A regulation works differently: its provisions apply directly, from the date indicated in the act itself. For companies this means a single, common set of requirements regardless of the EU country in which they sell a packaged product.

The main objective of PPWR is to reduce the volume of packaging waste and accelerate the transition to a circular economy, that is an economic model in which materials circulate for as long as possible instead of going to landfill after a single use. The Regulation covers the entire life cycle of packaging: design, production, placing on the market, labelling, as well as collection and recycling after use.

 

When PPWR applies – timeline of entry into force

The PPWR entered into force on 11 February 2025, but its provisions only begin to apply from 12 August 2026. This does not, however, mean that all obligations start on the same day, because some of them have been spread over 2028, 2029, 2030 and subsequent years.

The key dates in the legislative process are as follows:

1. 19 December 2024. The European Parliament and the Council adopted the final text of the Regulation.
2. 22 January 2025. Publication in the Official Journal of the European Union as Regulation (EU) 2025/40.
3. 11 February 2025. Entry into force; the eighteen-month vacatio legis, that is the transitional period before the provisions begin to apply, runs from this date.
4. 12 August 2026. General date of application of the Regulation.

It is worth distinguishing between these last two dates. Entry into force means that the act formally exists in the EU legal order, but its provisions are not yet binding on companies. The date of application is the moment from which the requirements must actually be complied with.

On 5 June 2026 the European Commission published a notice containing interpretative guidance on PPWR (C(2026) 3702 final), supplemented by a set of answers to frequently asked questions. The guidance helps to apply the provisions uniformly across the Union, but does not itself amend or replace them. A binding interpretation of EU provisions may be issued only by the Court of Justice of the European Union, in short the CJEU.

 

Who PPWR applies to – manufacturer, producer, importer, distributor and others

PPWR applies to every entity participating in the packaging supply chain: companies designing or ordering packaging under their own brand, companies placing a packaged product on the market of a given country, importers from outside the EU, distributors, fulfilment service providers, and even online platforms. Which role a given company plays determines the scope of its obligations.

The Regulation uses several concepts that are frequently confused in practice, even though they entail different obligations.

A single company may play several of these roles at the same time, depending on the type of packaging and the stage at which it participates in the supply chain. That is why the first step in assessing whether PPWR applies to a given company should be to analyse separately each category of packaging that the company uses.

 

What packaging means under PPWR

Packaging within the meaning of PPWR is any item used to contain, protect, handle, deliver or present a product, regardless of the material from which it is made. The definition is deliberately broad and covers not only typical boxes or films, but also labels, tea bags and coffee machine capsules.

Annex I to the Regulation contains an indicative list of items regarded as packaging and of items that are not packaging. The Commission stresses in its guidance, however, that the mere appearance of an item on that list does not settle the matter. It is always necessary to check whether the item corresponds to the elements of the definition in the Regulation, that is whether it serves to contain, protect, handle, deliver or present a product to another entity without being an integral part of it.

A few examples from the guidance illustrate well how non-obvious this classification can be. A flower pot is packaging where it is used to sell and transport a plant, but it is not packaging where a nursery uses it solely in the cultivation process. Infusion bags and syringes, even when pre-filled with a medicine, are not packaging, because they form an integral part of a medical device. Containers for grave candles are expressly excluded from the definition in Annex I. Determinations of this kind must be assessed separately for each product, because classification is decided by the function and the intention with which the item is placed on the market, and not by its appearance or name alone.

 

The key obligations from 12 August 2026

From 12 August 2026, the provisions that begin to apply include limits on harmful substances in packaging and the requirement to carry out a conformity assessment and draw up technical documentation together with an EU declaration of conformity. This is the first stage of PPWR implementation, though not the only one and not the largest in terms of the number of requirements.

From that date, packaging intended to come into contact with food may not contain PFAS, that is per- and polyfluoroalkyl substances, also referred to as forever chemicals, above the established thresholds. The Regulation provides for several limit values depending on the test method.

In parallel, a limit on heavy metals applies: the total sum of the concentrations of lead, cadmium, mercury and hexavalent chromium in the packaging may not exceed 100 mg/kg. This requirement is carried over from the previous directive, so companies that already complied with it should above all update their technical documentation with a reference to the new Regulation.

From 12 August 2026, a general requirement that packaging placed on the market be recyclable also begins to apply, although for now without detailed, binding technical criteria; these will enter into force only in 2030. The manufacturer must also carry out a conformity assessment procedure and, on that basis, draw up an EU declaration of conformity based on technical documentation confirming compliance with the requirements applicable at the given time.

 

Which obligations will enter into force later – recyclability, labels, deposits

Most of the detailed PPWR requirements, including the full recyclability criteria, harmonised labels and the empty space limit in parcels, will only begin to apply between 2028 and 2040. Companies therefore still have time to adapt their processes, provided they start acting in advance.

The timeline for the subsequent stages is as follows:

1. By 12 February 2027. The Commission is to request the European standardisation organisations to develop a methodology for calculating compliance with the packaging minimisation requirements.
2. By 1 January 2028. A delegated act is planned setting out detailed criteria for design for recycling.
3. From 12 August 2028. Or 24 months from the entry into force of the relevant implementing act, packaging is to bear a harmonised label facilitating sorting.
4. From 1 January 2029. Member States must ensure the separate collection of at least 90 per cent of single-use plastic bottles and metal beverage cans with a capacity of up to three litres, which in practice requires the introduction of a deposit return scheme. A country may obtain an exemption from this obligation if it already achieves a collection rate of 80 per cent in 2026 and notifies the Commission by 1 January 2028.
5. From 12 February 2029. Or 30 months from the implementing act, labels will also cover reusable packaging.
6. From 1 January 2030. The following begin to apply at the same time: the full recyclability criteria, the requirement to minimise the weight and volume of packaging to the necessary minimum, a maximum 50 per cent share of empty space in grouped, transport and e-commerce packaging, a ban on placing selected single-use plastic packaging formats on the market, and a reuse target reaching 40 per cent for most transport packaging.
7. From 1 January 2035. The requirement for packaging to be recycled at scale will be specified in more detail.
8. From 1 January 2040. An indicative, non-binding target of achieving a 70 per cent share of reusable packaging in transport is envisaged.

The empty space limit is of particular significance for e-commerce, because it applies directly to packaging intended for electronic commerce, alongside grouped and transport packaging. The Commission is to set out the precise methodology for calculating this indicator in an implementing act.

Consequences of non-compliance with PPWR

Packaging that does not comply with PPWR may not be placed on the EU market, and market surveillance authorities may demand its withdrawal. The level of financial sanctions for infringements is, however, set by the individual Member States in their own legislation, which in Poland is still going through the legislative process.

Under Article 4 of PPWR, Member States may not prohibit or restrict the placing on the market of packaging that meets the requirements of the Regulation. They may, however, maintain or introduce additional national sustainability requirements, provided that these do not conflict with EU provisions. Compliance is enforced by the national market surveillance authorities, which may, depending on the scale of the infringement, demand the withdrawal of non-compliant packaging from the market, prohibit its further availability, or refer the matter for further proceedings.

The specific amounts of administrative penalties that Polish companies may face depend on the act implementing PPWR into the national legal order, which as at the date of publication of this article has not yet been enacted. Until it enters into force, companies should treat PPWR compliance above all as a condition for the lawful sale of a packaged product on the EU market, and not solely as a financial risk.

 

How to prepare your company for PPWR – practical steps

It is worth starting PPWR preparations by establishing your own role in the packaging supply chain, because it is that role which determines the scope of your obligations. The next step is an audit of the packaging used against the substance limits, and a conversation with suppliers about the available material documentation.

In practice, it is worth splitting this into several stages:

1. Establishing the role for each packaging category. The same company may be the manufacturer of some packaging and the producer or distributor of other packaging, which is why the analysis must be carried out separately for each type of packaging in the portfolio, taking into account the various business streams.
2. An audit of packaging for PFAS and heavy metals. It is worth collecting material documentation from suppliers before 12 August 2026, rather than waiting for an inspection.
3. Collecting documentation from suppliers. Suppliers of packaging materials should confirm the chemical composition of the raw materials, with test results where necessary.
4. Preparing technical documentation and the EU declaration of conformity. This concerns above all companies acting as the manufacturer within the meaning of the Regulation.
5. Tracking implementing and delegated acts. The detailed criteria for recyclability, labelling and calculating empty space are still being developed, so it is worth monitoring their publication in 2027 and 2028.
6. Registration in extended producer responsibility schemes. Companies acting as the producer must register and report data in the country in which the packaging first reaches the market.

Companies that begin this process in advance will avoid a situation in which a change to packaging design in the middle of the sales season forces costly and hurried corrections.

 

 

Would you like to check where to begin your PPWR preparations? Ask about the PPWR Scanner and take advantage of an expert assessment prepared by our ESG team. We will help you identify obligations, potential risks and areas requiring action in connection with the new PPWR requirements.

 

 

FAQ: Frequently asked questions about PPWR

 

How does PPWR differ from the former packaging directive 94/62/EC?

The directive required transposition into the law of the individual EU countries, which led to differences between markets. PPWR, as a regulation, applies directly and uniformly in all Member States, with no need to enact separate national legislation.

 

Does PPWR ban the use of plastic packaging?

No. The Regulation does not introduce a general ban on plastics in packaging. It only restricts selected single-use packaging formats listed in Annex V, from 2030, and imposes requirements concerning recyclability, recycled content and the reduction of excess material.

 

Is a microenterprise also subject to PPWR obligations?

As a rule yes, but the Regulation provides for an exception in the definition of manufacturer. If the company commissioning the design of packaging under its own brand is a microenterprise and the packaging supplier operates in the same Member State, it is the supplier, and not the commissioning party, that is regarded as the manufacturer within the meaning of PPWR.

 

Does packaging placed on the market before 12 August 2026 have to be withdrawn or replaced?

According to the FAQ of August 2026, packaging that has not been placed on the market by 12 August 2026 but has already been produced and is held in a warehouse does not have to be destroyed, re-manufactured or re-labelled.

In order to meet the requirements set out in Article 15(5) and (6), under which packaging must bear a unique identifier and the name and address of the manufacturer, the required information may be provided in a document accompanying the packaging. This also applies to reusable packaging that has already been placed on the market.

However, in the case of packaging produced after 12 August 2026, an accompanying document may be used only where the nature or size of the packaging makes it impossible to place the unique identifier and the name and address of the producer directly on the packaging.

Packaging that was placed on the market before 12 August 2026 may remain on the market even if it does not comply with the PPWR requirements.

 

Can a branch of a foreign company in Poland act as an importer within the meaning of PPWR?

According to the European Commission’s guidance, no, because a branch does not have separate legal personality. To act as an importer, a foreign company must have a subsidiary in Poland with its own legal personality or designate an authorised representative.

 

Does PPWR apply uniformly in all EU countries?

The basic requirements do, because the Regulation operates directly and without national transposition. Member States nevertheless retain a certain margin of discretion; for example, they may introduce additional national requirements concerning compostability or higher recycling targets, provided that these do not conflict with EU provisions and do not create barriers in the internal market.

 

How ALTO Advisory supports companies in implementing PPWR

The scope of our services includes in particular:

• identifying the company’s roles under PPWR (manufacturer, importer, distributor, fulfilment service provider, producer and others),
• mapping packaging and product flows within the organisation,
• classifying packaging and analysing the obligations applicable to individual packaging categories,
• carrying out gap analyses and developing PPWR adaptation plans,
• support in preparing declarations of conformity, technical documentation and conformity assessment procedures,
• developing policies, procedures and operating instructions supporting the fulfilment of PPWR obligations,
• training for management boards and operational teams,
• ongoing expert advice during implementation and monitoring of regulatory developments.

 

 

 

Would you like to check where to begin your PPWR preparations? Ask about the PPWR Scanner and take advantage of an expert assessment prepared by our ESG team. We will help you identify obligations, potential risks and areas requiring action in connection with the new PPWR requirements.

 

 

 

Sources

1. Regulation (EU) 2025/40 of the European Parliament and of the Council of 19 December 2024 on packaging and packaging waste, amending Regulation (EU) 2019/1020 and Directive (EU) 2019/904, and repealing Directive 94/62/EC (OJ L, 2025/40, 22.1.2025)
2. European Commission notice: Guidance on Regulation (EU) 2025/40 on packaging and packaging waste, Brussels, 5.6.2026, C(2026) 3702 final
3. Directive 94/62/EC of the European Parliament and of the Council of 20 December 1994 on packaging and packaging waste (OJ L 365, 31.12.1994, p. 10), repealed by Regulation (EU) 2025/40
4. European Commission, Directorate-General for Environment, Packaging and Packaging Waste Regulation (PPWR). Frequently Asked Questions, 2nd ed., Publications Office of the European Union, Luxembourg 2026

 

 

Your company pays for a patent licence, interest on an intra-group loan, remuneration for management services and a dividend to its parent company. Each of these payments triggers two theoretically independent regimes: withholding tax and transfer pricing. You settle and document them separately, but they are based on the same facts, and the authority reads them together.

In companies forming part of capital groups – and pharmaceutical companies are usually among them – payments of this kind are practically an everyday occurrence. At the same time, however, they are among the areas most frequently and most meticulously scrutinised by the tax authorities.

 

Key takeaways

• The domestic WHT rate is 20 per cent for receivables under Article 21(1) of the CIT Act and 19 per cent for dividends under Article 22(1).
• The exemption for interest and royalties covers only the amount corresponding to arm’s length conditions. Any excess resulting from the relationship does not benefit from the preference (Article 21(7) of the CIT Act).
• Article 22 of the CIT Act contains no provision structurally corresponding to Article 21(7). In the case of dividends, the risk is assessed differently, primarily through Article 22c (the so-called minor anti-avoidance clause).
• The pay and refund mechanism applicable once PLN 2 million is exceeded covers receivables under Article 21(1)(1) and Article 22(1). Intangible services under Article 21(1)(2a) do not fall within this catalogue.

 

Which foreign payments made by a pharmaceutical company are subject to withholding tax?

It all begins with two statutory catalogues. The first, set out in Article 21(1)(1) of the CIT Act, covers interest, copyright and related rights, rights to inventive designs, trademarks and ornamental designs, the sale of those rights, receivables for making available a secret formula or production process, the use of industrial, commercial or scientific equipment, and know-how. The domestic rate here is 20 per cent. Separately, in Article 21(1)(2a), the legislator lists advisory, accounting, market research, legal, advertising, management and control, data processing and recruitment services, guarantees and sureties, as well as services of a similar nature.

The second catalogue, set out in Article 22(1), concerns dividends and other income from participation in the profits of legal persons. In this case the rate is 19 per cent.

These are the domestic rates, not the rates actually withheld. In order to apply the rate provided for in a double tax treaty or to apply a statutory exemption, you need a certificate of residence and you must exercise due diligence (Article 26(1) of the CIT Act). Its assessment takes into account the nature and scale of your activity (as well as, in practice, the activity of the entire group) and the relationship with the recipient. The Act does not define due diligence, so do not count on a closed list of documents that will always ensure it.

 

Why does the licence fee rate determine both transfer pricing and withholding tax at the same time?

A licence fee for a patent, trademark or know-how is a receivable under Article 21(1)(1) of the CIT Act and, at the same time, a controlled transaction whose price should correspond to arm’s length conditions (Article 11c). Both obligations meet in a single provision.

Article 21(7) of the CIT Act operates as follows: if, as a result of the relationship, the conditions differ from those that would have been agreed by independent entities, and the amount of the receivable is higher than would have been expected in the absence of that relationship, the exemption applies only to the amount corresponding to the arm’s length level. A non-arm’s length royalty rate therefore entails not only the risk of an income adjustment, but also an exemption narrower than the amount you actually paid.

The second question is: which entity in the group is economically entitled to the income from the intangible asset. The 2022 OECD Transfer Pricing Guidelines answer this through an analysis of DEMPE functions, that is development, enhancement, maintenance, protection and exploitation. Legal ownership of title to a patent does not in itself determine the remuneration. In the local file, this corresponds to the requirement to describe the analysis of functions, risks and assets (Article 11q(1) of the CIT Act).

 

What has to be established in relation to interest on an intra-group loan beyond the interest rate?

Interest falls within Article 21(1)(1) of the CIT Act and, on the transfer pricing side, is subject to an arm’s length assessment. It is necessary to prepare a reliable and complete benchmark confirming that the method of calculating the interest has been set on arm’s length terms. Sometimes even more detailed analyses are required, consisting in an assessment of whether the company’s overall level of “indebtedness” is at arm’s length – in short, whether a company operating on the market would in fact be able to take out such a large loan and continue to function (the so-called debt capacity analysis).

The legislation also provides for certain documentation simplifications, for example the safe harbour, where the interest rate falls within the parameters of the minister’s announcement.

The safe harbour, however, only simplifies the TP documentation issue. It does not release you from examining the status of the recipient of the interest, it does not replace the assessment of borrowing capacity and it has no effect on the debt financing cost limit under Article 15c of the CIT Act, which you calculate independently.

 

When does the exemption for a dividend paid to a parent company not apply?

The exemption under Article 22(4) of the CIT Act requires, among other things, that the recipient be a company subject to tax on its entire income in a European Union or European Economic Area state, holding directly at least 10 per cent of the shares for the required period and not benefiting from an exemption covering all of its income.

Irrespective of those conditions, Article 22c of the CIT Act applies, which excludes the preference where benefiting from it would be contrary to the subject matter or purpose of the provisions on the exemption or where it constituted the main purpose of the transaction and the manner of acting was artificial.

The case law is consistent on this point: as the payer of the dividend, you cannot confine yourself to formal documents, you must also examine whether the payment of the dividend is consistent with the company’s function within the group and does not lead, in short, to tax optimisation. This was indicated by, among others, the Supreme Administrative Court in its judgment of 6 October 2023 (II FSK 1333/22), referring to the case law of the CJEU in the Danish cases of 26 February 2019.

 

How should intangible services from headquarters and research services be classified?

The order of the analysis is the reverse of the intuitive one. First you check whether the service falls within the catalogue set out in Article 21(1)(2a) of the CIT Act, and only then do you turn to the double tax treaty. If the remuneration constitutes the business profit of a non-resident enterprise without a permanent establishment in Poland, no tax may arise.

The greatest scope for dispute concerns services of a similar nature. The test developed by the Supreme Administrative Court in its judgment of 5 July 2016 (II FSK 2369/15) requires that the features of the services listed in the provision prevail over the features of a service not listed there. The intangible nature of a service alone is not sufficient.

On the transfer pricing side, the same services require demonstrating an actual benefit for the service recipient and justifying the cost allocation keys.

 

Who is the beneficial owner of royalties and interest?

The definition in Article 4a(29) of the CIT Act requires three elements jointly. The recipient receives the payment for its own benefit, independently decides on its use and bears the economic risk of losing it. It is not an intermediary, representative, trustee or an entity obliged to pass the payment on. It carries on genuine business activity, assessed accordingly under Article 24a(18).

The tax explanations issued by the Minister of Finance on 3 July 2025 and published on 9 July 2025 add an important indication to this: the required asset and personnel base must be adequate to the type of activity carried on. Different expectations apply to a manufacturer, different ones to a research and development centre, and different ones to a holding company. The absence of an in-house laboratory therefore does not in itself determine the absence of genuine activity.

In practice, during audits the authorities often set very high requirements before accepting that the taxpayer (the recipient of the payment) is the beneficial owner. Sometimes the requirements of the auditing authority are in fact higher than what follows from the Ministry of Finance’s explanations. That is why it is so important to develop a specific strategy for conducting the tax or customs and fiscal audit. It is critical that the arguments of the audited company supporting the correctness of its settlements be consistently raised and documented from the outset of the case.

 

What does an audit of withholding tax and transfer pricing look like?

What is extremely important, both areas are among the audit priorities of the tax administration. Withholding tax is examined primarily with regard to the status of the recipient of the payment and the genuine activity carried on by foreign holding companies, and transfer pricing with regard to the consistency of the declared model with the actual settlements.

In the pharmaceutical industry the risk is higher than average, because group structures are complex, the values of intra-group transactions are large, and intellectual property licences and intra-group financing are the standard, not the exception. The entry into force of the JPK CIT further shortens the distance between filing a return and its verification.

Why are these areas at the top of the tax authorities’ list? There are several reasons. Above all, they concern large (often multi-million) amounts of payments made. It is also not without significance that the payments made are not so-called one-offs. Quite the contrary – group payments are made annually. If the authority verifies and assesses additional tax for one year, it can relatively “easily” transfer those findings to the settlements for the remaining open settlement periods.

Another reason is that, both in the area of WHT and TP, the provisions use highly imprecise, open-ended concepts. Which price is genuinely at arm’s length, who is the beneficial recipient, which services are similar – these are questions to which there are very often no black-and-white answers. And if that is so, they are susceptible to assessment and interpretation, and therefore also to challenge during an audit.

There is no closed list of documents that the authority may demand. The scope follows from which condition for the preference has to be demonstrated. In the case of holding structures, the material usually includes registration documents and the ownership structure, agreements and documentation of the flow of payments, data on the recipient’s personnel, premises and equipment, financial statements, as well as transfer pricing documentation with an analysis of functions, risks and assets.

This last element is sometimes underestimated. The local file is not a WHT document, but it describes the same circumstances on which the assessment of the recipient’s status is based. Any discrepancy between its content and the arguments presented in the withholding tax case is of evidentiary significance.

ALTO specialises in conducting such proceedings. We represent companies in transfer pricing and withholding tax audits, in proceedings for the refund of tax withheld, and in disputes at the appeal and court stage, before the voivodship administrative courts and the Supreme Administrative Court. We also prepare transfer pricing documentation, beneficial owner status analyses and applications for an opinion on the application of preferences.

 

FAQ

 

Is the PLN 2 million threshold in withholding tax the same threshold as in transfer pricing?

No, these are two separate constructions with a coinciding value. In transfer pricing, the documentation thresholds under Article 11k(2) of the CIT Act are PLN 10 million for commodity and financial transactions and PLN 2 million for service and other transactions, and they are calculated for a controlled transaction of a homogeneous nature, not for a single invoice or agreement. In withholding tax, the PLN 2 million under Article 26(2e) is the total of specified receivables paid to the same related entity in a tax year. Exceeding one threshold does not always mean exceeding the other.

 

What conditions have to be met in order to apply the exemption for interest and royalties?

The exemption under Article 21(3) of the CIT Act does not operate automatically. The conditions concern the status and residence of the companies in the European Union or the European Economic Area, the level of the relationship (as a rule, direct or indirect holding of at least 25 per cent of the shares), an uninterrupted two-year period of maintaining that holding, beneficial owner status, carrying on genuine business activity and not benefiting from an exemption covering all income. The Act allows for a situation in which the required period expires only after the payment has been made.

 

Can an opinion on the application of preferences expire before 36 months have elapsed?

Yes. In the event of a material change in the factual circumstances affecting the fulfilment of the conditions for the preference, the applicant has 14 days to inform the authority, counted from the day on which it learned of the change or, exercising due diligence, should have learned of it (Article 26b(8) of the CIT Act). If you report the change within the time limit, the opinion expires on the last day of the month following the month in which that time limit elapsed. If you do not report it, the opinion expires as early as the day on which the taxpayer ceased to meet the conditions.

The Ministry of Finance is at the same time planning to extend the validity period of the opinion on the application of preferences to 5 years. The status of the legislative work on this act needs to be monitored.

 

Who is liable for withholding tax not withheld by the Polish company?

The payer is liable for tax not withheld, or withheld and not remitted (Article 30 of the Tax Ordinance). Fiscal penal liability operates separately: Article 78 of the Fiscal Penal Code concerns failure to withhold tax or withholding it in an amount lower than that due, and Article 77 concerns tax withheld but not remitted on time. Under Article 9 § 3 of that code, liability may also attach to a person who in fact deals with the economic, in particular financial, affairs of the company.

This material is of an informational nature and does not constitute tax advice; the application of the principles described requires an analysis of the specific factual circumstances.

 

Sources

 

Legislation

• Act of 15 February 1992 on Corporate Income Tax: Article 4a(29), Article 11a(1)(4) and (2), Article 11c, Article 11e, Article 11g, Article 11k(2), Article 11n(1), Article 11q(1), Article 11t(1), Article 15c, Article 21(1), (3) and (7), Article 22(1) and (4), Article 22c, Article 24a(18), Article 26(1), (2e) and (7a), Article 26b, Article 28b
• Act of 29 August 1997 – Tax Ordinance: Article 14a § 1(2), Article 14n § 4(1), Article 30
• Act of 10 September 1999 – Fiscal Penal Code: Article 9 § 3, Article 77, Article 78

 

Case law

• Supreme Administrative Court, judgment of 5 July 2016, II FSK 2369/15
• Supreme Administrative Court, judgment of 6 October 2023, II FSK 1333/22
• Supreme Administrative Court, judgment of 6 May 2025, II FSK 1082/22
• CJEU, Grand Chamber judgments of 26 February 2019, the Danish cases: C-115/16, C-116/16, C-117/16, C-118/16, C-119/16, C-299/16

 

Individual tax rulings

• Director of the National Revenue Information Service, ruling of 3 September 2020, 0111-KDIB1-2.4010.220.2020.4.BG
• Director of the National Revenue Information Service, ruling of 5 August 2022, 0111-KDIB1-2.4010.301.2022.2.ANK

 

Official materials and industry standards

• Tax explanations of the Minister of Finance of 3 July 2025 concerning the application of the beneficial owner clause for withholding tax purposes, published on 9 July 2025
• Announcement of the Minister of Finance and Economy of 10 December 2025 on the type of base interest rate and margin for transfer pricing purposes, M.P. 2025 item 1249
• OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, Chapter VI