Estonian CIT rulings in Poland – Supreme Administrative Court (NSA) on dividends, hidden profits and bond contributions

Recent Estonian CIT rulings in Poland clarify how dividends, related-party bond interest and in-kind contributions are taxed. The Supreme Administrative Court (NSA) confirmed that 19% PIT applies to the full distributed profit, bond interest paid to related parties may constitute hidden profits, and contributions of privately held bonds do not necessarily prevent a company from electing Estonian CIT.

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How is dividend PIT calculated under Estonian CIT?

In its judgment of 29 September 2026 (II FSK 1274/23), the NSA confirmed that 19% PIT must be calculated on the full amount of distributed profit attributable to the shareholder.

The company’s Estonian CIT liability cannot first be deducted from the PIT tax base.

This interpretation is consistent with earlier judgments of 3 June 2026 (II FSK 992/23) and 18 June 2026 (II FSK 993/23).

Under Article 30a(19) of the Polish Personal Income Tax Act, shareholders may apply a statutory PIT credit:

• 10% Estonian CIT rate: 90% of the relevant company tax may be credited against PIT.
• 20% Estonian CIT rate: 70% of the relevant company tax may be credited against PIT.

What is the combined tax burden?

Assuming PLN 100,000 in distributed profit attributable to one individual shareholder, with the full statutory credit available:

Tax calculation	CIT 10%	CIT 20%
Company tax	PLN 10,000	PLN 20,000
PIT before credit	PLN 19,000	PLN 19,000
PIT credit	PLN 9,000	PLN 14,000
PIT payable	PLN 10,000	PLN 5,000
Combined tax burden	20%	25%

Companies must distinguish profits earned under Estonian CIT from those generated before entering the regime.

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Can bond interest constitute hidden profits?

In its judgment of 1 October 2026 (II FSK 1291/23), the NSA ruled that interest on bonds issued by an Estonian CIT company and paid to a related party may constitute hidden profits.

The company argued that Article 28m of the Polish Corporate Income Tax Act explicitly refers to loan interest but does not specifically mention bonds.

The Court rejected this distinction, emphasising the economic function of the financing arrangement.

Issuing bonds instead of obtaining a loan does not automatically prevent related-party interest from being classified as hidden profits.

Companies using intra-group financing should therefore assess potential Estonian CIT liabilities alongside commercial financing costs.

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Do bond contributions affect eligibility for Estonian CIT?

In judgment II FSK 1300/23 of 1 October 2026, the NSA confirmed that contributing bonds from shareholders’ private assets does not necessarily trigger a temporary exclusion from Estonian CIT.

Article 28k of the Polish Corporate Income Tax Act establishes restrictions concerning certain restructuring transactions and in-kind contributions.

However, exceeding the EUR 10,000 threshold alone is insufficient to exclude a company from the regime.

The assessment must establish whether the contribution includes an enterprise, an organised part of an enterprise or business assets.

Privately held bonds that are not part of a shareholder’s business assets do not automatically trigger exclusion under Article 28k(1)(6), read together with Article 28k(2).

Other statutory exclusions may nevertheless apply.

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What should companies review?

Before undertaking significant transactions, companies should examine:

• Dividend distributions: profit origin, PIT calculations and statutory credits.
• Related-party financing: economic substance and potential hidden-profit taxation.
• In-kind contributions: asset ownership, origin, value and connection with business activities.

The NSA judgments do not introduce new legislation. They clarify the interpretation of existing provisions in specific circumstances.

Companies should therefore assess their own transactions against the facts considered in the relevant judgments.

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If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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