2026-07-16
B2B arrangements under tax scrutiny: how Poland’s UD116 bill could change the tax treatment of entrepreneurs
Poland’s draft bill UD116 could significantly change the tax treatment of certain entrepreneurs operating under B2B arrangements. The proposed rules would not abolish self-employment or Poland’s lump-sum tax regime on recorded revenue. However, they are intended to reduce the tax attractiveness of certain structures, particularly transactions with related parties, service businesses operating without employees, and the use of the Polish IP Box regime.
The proposed tax changes form part of a broader regulatory focus in Poland on how B2B contracts are used in practice. Since 8 July 2026, new rules have also been in force strengthening the powers of the Polish National Labour Inspectorate in relation to civil-law contracts and B2B arrangements that, in practice, replace an employment relationship. The labour inspection reform and the UD116 bill concern different areas of law, but together they indicate that both the actual manner in which cooperation is performed and the tax structure applied to it will be subject to closer scrutiny.
The UD116 bill is currently at the government legislative stage. According to the Polish government’s legislative agenda, its adoption by the Council of Ministers is planned for the third quarter of 2026. The final wording of the proposed rules may therefore still change.
Services provided to related parties – 17% lump-sum tax
One of the most important proposals is the introduction of a 17% lump-sum tax rate on revenue from services provided to a related party.
The change may primarily affect shareholders who also operate as sole traders and invoice their own companies. In practice, this often concerns fees for advisory, IT, marketing, administrative, commercial or management-related services.
Providing services to one’s own company is not prohibited under Polish law. However, the Polish Ministry of Finance has raised concerns about arrangements in which B2B remuneration may, in economic terms, replace the distribution of dividends.
In Poland, dividends are subject to 19% personal income tax and are not tax-deductible for the company. By contrast, where services are invoiced under a B2B arrangement, the company may generally recognise the remuneration as a tax-deductible cost, while the shareholder may tax the revenue under the lump-sum regime.
Under the proposed rules, such services would be taxed at 17% of revenue. This means that tax would be calculated on the gross value of the invoices, without any deduction for business expenses.
This would not automatically result in every agreement between a shareholder and their company being challenged. It would, however, be necessary to determine whether the parties qualify as related parties under Polish tax law and whether the service falls within the scope of the new rate.
Letting property to one’s own company
The proposed changes would also cover rental and lease income received from related parties. This may include situations in which a shareholder lets office space, a warehouse, an industrial facility or another property to their own company.
Under the current Polish rules, private rental income is subject to lump-sum tax at:
- 8.5% on annual revenue of up to PLN 100,000, and
- 12.5% on the excess above PLN 100,000.
According to the version of the proposal currently being discussed, where property is let to a related party, the rate applicable to revenue exceeding PLN 100,000 would increase to 15%.
The purpose of the change is to limit structures in which the company deducts rent paid to the shareholder as a business expense, while the shareholder taxes the corresponding income under the lump-sum regime.
The letting arrangement itself would remain permissible, but its overall tax efficiency could be reduced.
Entrepreneurs should also bear in mind that a related party is not limited to a company in which the landlord directly holds shares. Related-party status may also arise from indirect control, significant influence or family relationships.
Trademarks and other intellectual property rights – 17% rate
The higher lump-sum rate would also apply to certain income from rental, lease or similar agreements involving intellectual property rights where the agreement is concluded with a related party.
In practice, this may concern arrangements in which a shareholder owns a trademark, business name, logo or another proprietary right and licenses or otherwise makes it available to their company in return for payment.
The company may recognise the payment for the use of the right as a tax-deductible expense, while the shareholder receives remuneration taxed under the lump-sum regime.
The proposed tax rate for this type of income is 17%. The change could therefore reduce the attractiveness of structures in which licence fees or payments for the use of intellectual property also serve as a means of transferring funds from the company to its shareholder.
Higher rate for service businesses without employees
Another significant change may affect entrepreneurs providing services that are currently subject to Poland’s 8.5% lump-sum tax rate.
Under the version of the bill currently being discussed, an entrepreneur who does not employ at least one full-time employee throughout the relevant tax year would have to apply a 15% rate to the portion of annual revenue exceeding PLN 100,000. Revenue up to that threshold would continue to be taxed at 8.5%.
This may be particularly relevant for sole traders whose annual revenue exceeds PLN 100,000 but who do not require employees due to the nature of their activities. Potentially affected groups may include consultants, trainers, marketing specialists and other professionals who provide services independently.
The right to retain the lower rate would be linked to maintaining the required level of employment throughout the period in which the business is operated during the relevant tax year.
If the entrepreneur ceased to employ the required person during the year, it might be necessary to recalculate the lump-sum tax due on revenue earned from the beginning of that year.
IP Box subject to an employment requirement
One of the most significant proposed changes for Poland’s technology sector concerns access to the Polish IP Box regime.
Under the current rules, qualifying income from specified intellectual property rights may be taxed at a preferential rate of 5%. The regime is commonly used by software developers operating as sole traders who independently create or develop software as part of research and development activities.
The UD116 proposal would make access to the IP Box regime conditional on employing at least three individuals who are not related to the taxpayer.
As a result, actually carrying out research and development, creating qualifying intellectual property and maintaining the required tax records may no longer be sufficient to apply the 5% rate.
In practice, the change could exclude a significant number of independent specialists from the preferential regime.
IP Box income to be included in the solidarity levy base
UD116 also provides for IP Box income to be included in the tax base used to calculate Poland’s solidarity levy.
The solidarity levy is charged at 4% on the portion of certain categories of income exceeding PLN 1 million. Following the proposed changes, income taxed under the 5% IP Box rate would also be taken into account when determining whether the taxpayer has exceeded that threshold.
The bill is also intended to confirm that the solidarity levy base may be reduced by tax losses carried forward from previous years, but only where those losses arise from the same source of income included in the levy calculation.
Other deductions and tax reliefs available under the Polish personal income tax system would not automatically reduce the solidarity levy base.
Cars purchased after leasing – three-year period before a tax-free sale
The bill also addresses a common arrangement involving vehicles purchased after the end of an operating lease and subsequently transferred to close family members.
The proposed change concerns situations in which an entrepreneur purchases a vehicle into their private assets, gives it to a close family member and the recipient subsequently sells it.
Under the proposed rules, the sale would be subject to personal income tax if it takes place within three years of the recipient acquiring the vehicle.
The gift itself may still qualify for an exemption from Polish inheritance and gift tax, provided that the relevant statutory conditions are met. However, the possibility of quickly selling the vehicle without personal income tax would be restricted.
What does UD116 mean for entrepreneurs?
The UD116 bill does not signal the end of the B2B model in Poland. It could, however, materially affect the tax efficiency of certain business structures.
The proposals should be reviewed in particular by individuals who:
- invoice their own company or another related entity,
- let property to their own company,
- make trademarks or other intellectual property rights available to related parties,
- apply the 8.5% lump-sum rate without employing staff, or
- benefit from the Polish IP Box regime.
As the bill has not yet been adopted by the Polish Council of Ministers, it is too early to implement definitive changes to existing business structures. Nevertheless, taxpayers should already consider estimating the potential increase in their tax burden and preparing alternative tax scenarios before the beginning of 2027.
Particular attention should be paid to the final scope of services subject to the 17% rate, the detailed construction of the employment requirements and the rules used to determine whether entities are related parties for Polish tax purposes.
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