Poland Raises Corporate Tax to 22%: Who's Paying for the Middle-Class Tax Cut?

Poland's government plans to raise the corporate income tax rate for large companies from 19% to 22%. This will affect companies and tax groups with annual revenue exceeding 50 million euros. Prime Minister Donald Tusk and Finance Minister Andrzej Domański presented the package on August 19 in Warsaw. It is scheduled to take effect in 2027.

The increase will finance income tax relief. About 3.5 million employees earning average wages or slightly above are expected to pay less.

New tax bracket at 24%

Until now, Poland has had two tax rates: 12% on annual income up to 120,000 złoty (approx. 27,800 euros), and 32% on income above that threshold. In the future, the 12% rate will apply up to 130,000 złoty (approx. 30,100 euros). A new 24% bracket will apply to incomes between 130,000 and 150,000 złoty (approx. 34,700 euros). The 32% rate will apply only to incomes above 150,000 złoty.

The solidarity surcharge on income over 1 million złoty (approx. 231,000 euros) will increase from 4% to 5%. The maximum tax relief amounts to 3,600 złoty (approx. 830 euros) per year.

This change is driven by wage trends. In June 2026, employees at companies with more than nine employees earned an average of 9,401.58 złoty gross per month, according to Główny Urząd Statystyczny (GUS), the Polish Statistical Office. That amounts to nearly 113,000 złoty per year, close to the previous threshold for the top tax rate.

“We’re not talking about millionaires here; we’re talking about a growing middle class,” said Domański. He described the package as largely budget-neutral.

The president’s veto stands in the way

Poland’s financial situation limits its room to maneuver. The government deficit rose to 7.3% of GDP in 2025, up from 6.4% in 2024—the second-highest level in the EU. In June 2026, the national debt exceeded the EU threshold of 60% of GDP for the first time. Fitch and Moody’s downgraded the outlook to negative.

The bill requires approval by Parliament and the President. Karol Nawrocki, considered part of the right-wing camp, has already blocked several tax bills: in December 2025, the higher tax on alcohol and sugary drinks; and in July 2026, the windfall profit tax on fuel companies. He allowed the higher corporate income tax for banks to pass in November 2025.

For German companies, the revenue threshold is particularly important. In the first half of 2025, Poland was the fourth-largest buyer of German goods, with 49.4 billion euros in sales—a 5.6% increase compared to the same period the previous year, according to the German Committee on Eastern European Economic Relations, based on Destatis figures. German subsidiaries with more than 50 million euros in revenue in Poland would have to budget for a three-percentage-point increase in corporate income tax starting in 2027. Anyone drawing up budgets for 2027 now would be wise to account for both scenarios: with and without a veto.

Sources: Notes from Poland (EN), Office of the Prime Minister (PL), Central Statistical Office (PL), German Committee on Eastern European Economic Relations (DE)

SK, Frankfurt