Accounting in Poland for a Foreign Parent Company

A Polish subsidiary is not a branch of your accounting department. It is a separate legal person with its own statutory books, its own filing calendar and its own liability, and the group’s consolidation pack does not discharge any of it.

That distinction is where most foreign parents get caught. The group knows what it needs — a monthly reporting pack in its own format, on its own deadline. What it often does not know is that Poland requires a parallel set of records kept to Polish accounting law, in Polish, in złoty, and filed on dates that have nothing to do with the group’s calendar.

Two sets of books, or one set read two ways

Polish law requires the company’s books to be kept under the Accounting Act (ustawa o rachunkowości), in Polish and in złoty. The group wants figures mapped to its own chart of accounts, usually under IFRS or the parent’s local GAAP, often in another currency.

There are two honest ways to run this, and choosing badly is expensive:

One ledger, mapped upward. The statutory Polish ledger is the single source of truth, and a mapping table converts it into the group’s chart of accounts each month. This is the cheaper and more auditable arrangement, and it is what we recommend for most subsidiaries. It requires the mapping to be built once, properly, and reviewed whenever either chart changes.

Two ledgers, reconciled. The group system runs in parallel and the Polish books are maintained separately, with a reconciliation each period. Sometimes unavoidable — a parent with a rigid ERP and no local instance — but it doubles the bookkeeping and every reconciling item becomes a question at audit.

The decision belongs at the start. Retrofitting a mapping onto eighteen months of entries costs far more than building it in the first month.

What has to happen locally, whatever the group does

Monthly. VAT is reported through the JPK_V7 file and paid by the 25th. Income tax advances and ZUS contributions fall on the 20th. None of these move because the group closes on a different day.

Annually. Financial statements must be prepared within three months of the balance-sheet date, approved by the shareholders within six, and filed with the KRS repository within fifteen days of approval. CIT-8 follows the tax year. The chain matters: approval is a shareholder act, and a foreign parent that has not planned for it can miss the filing window while waiting for a signature from head office.

Electronic signatures. Polish statutory accounts are signed and filed electronically. At least one management board member must hold a signature Poland recognises — a qualified certificate under eIDAS, or a Profil Zaufany. A board composed entirely of non-residents with no Polish credentials cannot file its own accounts, and this is discovered, reliably, in March.

The one regime you cannot use

Poland’s lump-sum corporate tax — ryczałt od dochodów spółek, marketed everywhere as “Estonian CIT” — defers tax until profit is distributed, and for the right company it is the best regime on offer. It is suggested to almost every new sp. z o.o.

It requires that every shareholder is a natural person. A company owned by another company does not qualify, and no size, activity or profit test rescues it. If your Polish entity is held by a foreign parent, the regime is closed for as long as that ownership stands.

So the realistic position is standard CIT: 19%, or 9% where the company qualifies as a small taxpayer. Worth settling before anyone quotes you a number based on the other regime — we check the shareholder register before discussing rates at all.

The chart of accounts is not a formality

Poland’s move to structured CIT reporting means the tax authority increasingly receives the ledger itself rather than a summary of it. That changes what a chart of accounts is for: it stops being an internal convenience and becomes a reporting interface with the tax office.

The practical consequence for a group subsidiary is that the mapping between the Polish statutory chart and the group’s chart has to be defensible, not merely workable. Accounts that lump together items the authority expects to see separately create work later — and the later it is found, the more periods have to be restated.

If you are setting up now, build the chart against the reporting requirement rather than against the group’s habit. If you already have books, an early review is cheaper than a retrospective one.

Intercompany is where the risk concentrates

Almost every foreign-owned Polish company has related-party transactions: management fees, licence fees, intra-group loans, cost recharges, goods bought from the parent. Three things follow.

Arm’s length. The price has to be the one unrelated parties would have agreed. “That is what the group charges everyone” is not, by itself, an answer.

Documentation. Above certain annual thresholds per transaction type, a local file must be prepared, with a benchmarking analysis. The thresholds are materially higher for goods and financing than for services, which surprises groups whose Polish entity buys little but is charged a large management fee.

Withholding tax. Dividends, interest and royalties leaving Poland attract withholding tax, reduced or eliminated by the relevant double-tax treaty or the EU directives — but only if the paperwork exists. A certificate of tax residence, valid for the period and in original or qualified electronic form, is the usual sticking point. Obtain it before the payment, not after.

Audit: check whether you are in scope before you assume you are not

Polish law requires a statutory audit when a company exceeds a defined size, tested on employment, total assets and net revenue. A subsidiary that is small in group terms can still cross the Polish thresholds — particularly one that holds inventory or has grown headcount quickly.

The test is applied to the preceding financial year, which means the obligation is known in advance. If you are close to the line, establish the position early: an auditor engaged in February for a year that closed in December is expensive, and appointing one is a shareholder decision.

What the group actually needs to send us

For a monthly close to run without chasing, we need, by an agreed date each month:

• Sales and purchase invoices in a consistent format. Structured e-invoicing through the national system is being phased in, which will change how these arrive — worth planning for rather than reacting to.
• Bank statements for every account, including any held outside Poland that the company uses.
• Payroll inputs — new hires, leavers, absences, variable pay — before the payroll run, not after.
• Intercompany documents: the agreement, not just the invoice. An invoice for a management fee with no underlying contract is a transfer-pricing problem waiting.
• Anything unusual, flagged. A one-off transaction explained in a sentence when it happens costs minutes. Discovered at year end, it costs a day.

What good looks like

A well-run Polish subsidiary produces its group pack and its statutory books from the same ledger, closes within a predictable number of working days, has a board member who can sign electronically, and knows in January whether it will need an audit for the year just ended.

None of that is difficult. It is simply decided at the beginning, or paid for repeatedly afterwards.

If you are setting up a Polish entity or reviewing one that is already running, we work with foreign parents across seven languages and will tell you plainly which of the above applies to you.