The introduction of a flat-rate tax on corporate income, commonly known as Estonian CIT, into Polish law has generated considerable interest from businesses. However, with the growing popularity of this form of settlement, tax authorities have intensified their verification of companies. Much controversy has arisen around the formal requirements related to the transition to the flat-rate tax, with the timely preparation and signing of financial statements becoming a key point of contention.
Pursuant to Article 28j, Section 5 of the Corporate Income Tax Act, a taxpayer may opt for lump sum taxation before the end of the tax year they have adopted if, on the last day of the month preceding the first month of lump sum taxation, they close their accounting books and prepare financial statements in accordance with accounting regulations.
According to the tax authorities, formal irregularities, such as failing to electronically sign the interim financial statements by the required deadline, result in the statement being deemed incomplete. Consequently, the authorities deem such a choice ineffective, depriving the company of its right to Estonian corporate income tax and forcing it to settle the tax under general rules, plus default interest.
The tax authorities' restrictive approach is supported by tax interpretations and administrative court rulings. These rulings indicate that the process of preparing financial statements is an integral part of the entire procedure, in which the required signatures by the entity's manager and the person responsible for maintaining the accounting records determine the document's ultimate legal validity. The tax authorities maintain that subsequent electronic signature of the statement and the submission of a correction after the statutory deadline do not remedy the original error. Furthermore, the authorities deny the validity of signing the document traditionally, for example, by affixing a handwritten signature on paper, considering such a form defective under the Accounting Act.
In contrast to the practice of tax authorities, individual adjudicating panels of administrative courts, representing a more liberal approach to the regulations, stand in opposition. A few, albeit extremely significant, rulings, such as the non-final judgment of the Provincial Administrative Court in Kraków (ref. I SA/Kr 179/26), emphasize that the purpose of introducing the provision requiring the preparation of a report upon transition to a flat-rate tax is primarily to ensure the proper separation of settlement periods and guarantee tax continuity. This requirement is substantive and systemic in nature, and a mere delay in submitting an electronic signature while maintaining the substantive accuracy of the books should not lead to such drastic sanctions as the loss of the right to preferential tax treatment. A literal interpretation of the Accounting Act allows for the separation of the technical act of preparing the document from its final approval and signing.
The situation of companies at risk of losing their Estonian corporate income tax (CIT) due to minor formal omissions has become so serious that the Ministry of Finance has addressed the issue. The Ministry of Finance has prepared a draft amendment to the tax laws, which provides for the introduction of a special recovery mechanism. The proposed regulations introduce a kind of amnesty for taxpayers whose financial statements prepared in connection with the selection of the Estonian corporate income tax (CIT) between the beginning of 2022 and the end of November 2026 were not signed by the authorized persons in a timely manner. The second version of the bill is currently being processed, and the amnesty solution has been retained. This is intended to eliminate formal omissions and preserve the right to a flat-rate tax for entities that have officially fallen victim to excessive procedural rigor.
The planned amendment also brings other significant systemic changes. It is possible that in the near future, the option of switching to Estonian CIT during the current tax year will be completely eliminated. This decision is motivated by the desire to simplify complex settlements.
On the one hand, the amnesty for overdue signatures provides a much-needed lifeline for entrepreneurs. On the other, the closure of the mid-year implementation path will deprive companies of a flexible tool for responding to changing economic conditions. Until the new regulations finally come into force, taxpayers using the Estonian CIT should remain especially vigilant and scrupulously monitor the deadlines and form of signing all financial documents.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of September 11, 2026.
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