The owner of several companies usually asks whether their tax can be settled “together”. The CIT Act (ustawa o CIT) gives two answers to different questions. A tax capital group (podatkowa grupa kapitałowa, PGK) is a single taxpayer in which the loss of one company reduces the current income of another. The holding company (spółka holdingowa) regime does not combine anything; instead, it exempts dividends from subsidiaries and income from selling them to an unrelated entity. The two regimes do not apply in the same company. We set out the conditions, benefits and limitations of both regimes and the reason why the decision has to be taken two years in advance.
Two regimes, two different problems
The choice depends on the objective: faster use of losses, or exemption of profits and exit from an investment.
Under Article 1a(1) of the CIT Act, a taxpayer may be a group of at least two commercial-law companies with legal personality that are linked by capital ties. Its income is the surplus of the companies’ income from a given source of revenue over their losses from that source (Article 7a(1)). The holding company regime (Articles 24m–24o) does not create a new taxpayer – it gives the holding company exemptions for dividends and for income from the sale of shares in a subsidiary.
In an individual tax ruling of 5 August 2026, no. 0111-KDIB1-1.4010.334.2026.1.SG, the Director of the National Revenue Information Service (Dyrektor Krajowej Informacji Skarbowej, the Director of the KIS) described the holding company rules as follows: “It constitutes an alternative to the existing institution of the Tax Capital Group (PGK), since neither the subsidiaries of holding companies nor the holding companies themselves may form part of a PGK” (translation by the author).
Write down the objective before you compare the conditions: loss-making companies alongside profitable ones are an argument for a PGK, while dividends or a planned sale of a subsidiary are an argument for the holding company regime.
PGK: entry conditions under the current wording of Article 1a
A PGK becomes a taxpayer once its agreement is registered, and its conditions are less stringent than older publications state.
Only the following companies with their registered office in Poland may form a group: a spółka z ograniczoną odpowiedzialnością (sp. z o.o.), the Polish limited liability company; a prosta spółka akcyjna (PSA), the Polish simple joint-stock company; and a spółka akcyjna (S.A.), the Polish joint-stock company (Article 1a(2)(1) of the CIT Act). The average share capital per company must be at least PLN 250,000, calculated excluding the part not paid up and the part covered by, among other things, receivables from loans (paragraph 2b). The parent company must hold a direct 75% shareholding in each subsidiary, and the companies may not have arrears in taxes constituting State budget revenue. Arrears are not an obstacle if, after joining the group, the company corrects its return and pays the arrears with interest within 14 days of the correction – or within 14 days of service of the first-instance authority’s decision (paragraph 2a).
The agreement is concluded “in writing, for a period of at least 3 tax years” (paragraph 2(2)). The parent company submits it at least 45 days before the start of the group’s tax year, and the head of the tax office (naczelnik urzędu skarbowego) registers it by way of a decision (paragraphs 4–5). The requirement of a 2% ratio of income to revenue no longer exists. In a ruling of 7 March 2025, no. 0111-KDWB.4010.140.2023.11.KKM, the authority stated that from 1 January 2022 “the condition requiring the tax capital group to maintain minimum profitability has been repealed”.
The authority may refer to a notarial deed in its reasoning – that is how it summarised the requirement in a ruling of 13 March 2025, no. 0114-KDIP2-1.4010.106.2025.1.JF. What is decisive, however, is the wording that the Director of the KIS quotes in rulings from 2025–2026: written form. A notarial deed does no harm, but it is not a condition.
Determine the capital under paragraph 2b, not from the register, and count the 45-day deadline back from the start of the group’s tax year – leaving a margin.
PGK: consolidation within a source and the fate of losses
A PGK accelerates the use of a loss, but only within the same source of revenue and only while the group lasts.
Consolidation under Article 7a(1) of the CIT Act operates separately for each source. The group’s loss does not pass to the companies after the agreement expires or after status is lost (paragraph 2). As a rule, the companies’ losses from before the group do not reduce its income (paragraph 3). From 2022 they may be deducted under the conditions of paragraphs 4–5 – up to a maximum of 50% of the loss and up to the income from that source earned in the given year by the company that incurred it. After the group ends, the five-year period for deducting losses from before the PGK includes the group’s years (Article 7(6a)). In the ruling of 13 March 2025 cited above, the Director of the KIS confirmed that this period “also covers the tax years of the PGK formed by the Company”.
Hypothetical example: company A has income of PLN 2,000,000 and company B a loss of PLN 800,000 from the same source. In a PGK the tax is (PLN 2,000,000 − PLN 800,000) × 19% = PLN 228,000; without the group it is PLN 2,000,000 × 19% = PLN 380,000. The difference of PLN 152,000 equals PLN 800,000 × 19%.
To a large extent this is a timing difference, because company B could deduct the loss itself over five years – up to 50% a year, or up to PLN 5,000,000 on a one-off basis (Article 7(5)). Compare both scenarios over the entire term of the agreement, taking into account company B’s realistic prospect of generating income.
PGK: loss of status, changes in composition and the end of the agreement
A breach of a condition during the term of the agreement ends the group on the day preceding the event and triggers a retrospective settlement; the ordinary expiry of the agreement’s term has no such effects.
Once the group has been formed, the companies must maintain the capital and the 75% shareholding, and they may not benefit from special economic zone exemptions under Article 17(1)(34) or (34a) or under separate acts (Article 1a(2)(3)). The condition requiring market prices in transactions with related entities outside the group was repealed from 1 January 2026 by the Act of 25 June 2025. The composition of the group changes only through a merger or division of subsidiaries on the terms set out in paragraph 6. A fall in the shareholding below 75% is a breach of the conditions (paragraph 8a), which the parent company reports within 30 days (paragraph 8).
The day preceding the breach is the day on which status is lost and the end of the group’s tax year (paragraph 10). Within 3 months the companies settle tax separately for the two years preceding the year in which status is lost and for the part of that year, as if the group had not existed. Where the group operated for less than three full years, the settlement covers the entire period (paragraphs 10a–10b). An underpayment constitutes tax arrears, with default interest from the original deadlines (paragraph 10c). For 3 tax years after the year in which status is lost, none of the companies may join another group (paragraph 13).
The authority reads the catalogue in paragraph 6 strictly. In a ruling of 22 September 2025, no. 0114-KDIP2-1.4010.434.2025.2.PK, it held that a division by separation of the parent company, with the shares in the subsidiaries transferred to a new company, ends the group: “The provision does not provide for the possibility of dividing the parent company in a tax capital group without loss of PGK status”. The acquisition by a group company of a company from outside the PGK does not end the group if “there is no breach of the conditions laid down in Article 1a of the CIT Act” (ruling of 29 July 2026, no. 0111-KDIB1-1.4010.309.2026.3.KM).
Ending the group through the expiry of the agreement is not a loss of status within the meaning of paragraph 10. The authority assessed an amendment shortening the agreement while keeping the three-year period “solely as an earlier end to the functioning of the PGK, i.e., upon the expiry of the term of the PGK agreement” (ruling of 26 March 2026, no. 0111-KDIB1-1.4010.37.2026.1.MF). Extending the group requires a new agreement or an amendment to be submitted within 14 days of its conclusion and to be registered (paragraph 9). Following the judgments of the Provincial Administrative Court (Wojewódzki Sąd Administracyjny, WSA) in Warszawa of 26 January 2023, case ref. III SA/Wa 1137/22, and of the Supreme Administrative Court (Naczelny Sąd Administracyjny, NSA) of 5 February 2026, case ref. II FSK 638/23, the authority accepted that a group extended with an unchanged composition retains the protection under the rulings obtained (ruling of 22 June 2026, no. 0111-KDIB1-2.4017.17.2021.9.BD).
Before a resolution on a merger, division or sale of shares, check paragraphs 6 and 8a; carry out any change outside the catalogue after the group has ended.
Holding company: conditions and two years of continuity
Holding company status means the full set of conditions for the holding company and for the subsidiary, met without interruption for at least two years.
A holding company may be a sp. z o.o., a PSA or an S.A. that is subject to tax in Poland on its entire income (Article 24m(1)(2)). It must hold, directly and on the basis of a title of ownership, at least 10% of the shares in the capital of the subsidiary. It may not form a PGK or benefit from special economic zone exemptions, and it must carry on genuine business activity (Article 24a(18), applied accordingly). Its shares may not be held, even indirectly, by a shareholder from a country on the lists referred to in point (e) or from a country with no basis for the exchange of tax information. The subsidiary may not hold participation titles in funds or rights in foundations and trusts, nor may it form a PGK (point 3). A domestic subsidiary may not be a PSA (point 1).
Under Article 24m(2), the conditions in paragraph 1(1)–(4) must be met without interruption for at least 2 years as at the day preceding the receipt of revenue from a dividend or from the disposal of shares. In a ruling of 18 December 2025, no. 0114-KDIP2-2.4010.501.2025.2.ASK, the authority explained: “The condition laid down in that provision therefore also covers the holding company holding, directly on the basis of a title of ownership, at least 10% of the shares in the capital of the subsidiary”.
In the ruling of 5 August 2026, a listed company could not establish its full shareholder base, so the authority did not recognise it as a holding company. The provision “does not exclude the need to meet them in a situation where it is not possible to obtain information about the shareholders”. With a dispersed shareholder base, assume that the regime may be unavailable.
Keep a holding company record showing the date from which all the conditions are met, together with the evidence, including the ownership chain. We discuss building a holding structure in the article Exchange of shares — how to build a holding structure without paying tax twice and in the e-book Exchange of shares and building a holding structure: conditions, taxes and documentation.
Dividends in a holding company: full exemption, but with a choice of basis
The current wording of Article 24n(1) of the CIT Act exempts a holding company’s revenue from dividends in full – without a limit of 95%.
The provision, in the wording quoted in the ruling of 5 August 2026, reads: “Revenue from the dividends referred to in Article 7b(1)(1)(a) obtained by a holding company from a domestic subsidiary or a foreign subsidiary is exempt from income tax”. Do not carry information about a 95% exemption over into settlements under the current wording. A foreign dividend is not exempt to the extent that the paying company may treat it as a tax-deductible cost or deduct it, nor where it comes from a company meeting the conditions in Article 24a(3)(3)(b) and (c) in the year of payment or in the 3 preceding years (paragraph 3). The second exclusion does not apply to a company from the EU or the EEA carrying on substantial genuine business activity there (paragraph 4).
For a dividend from a Polish subsidiary, there are two bases. In a ruling of 20 September 2024, no. 0111-KDIB1-1.4010.337.2024.2.AND, the Director of the KIS pointed out to the holding company: “you may use only one exemption, either that under Article 22(4) of the CIT Act or that under Article 24n(1) of the CIT Act”.
The absence of a single condition of the holding company definition during the two-year period rules out the exemption – “despite the other statutory conditions for those exemptions being met” (ruling of 5 August 2026). Before the resolution on the payment, therefore, specify the basis for the exemption in writing and pass it on to the paying company. If in doubt, check the conditions of Article 22(4) – we discuss them in the article on the exchange of shares.
Sale of shares by a holding company after 22 October 2025
From 22 October 2025 the exemption for income from the sale of shares in a subsidiary does not require a statement before the disposal, but it still requires an unrelated purchaser, two years of continuity and the real estate test.
Article 24o(1) of the CIT Act provides: “Income earned by a holding company from the disposal for consideration of shares in a domestic subsidiary or a foreign subsidiary to an unrelated entity referred to in Article 11a(1)(3) is exempt from income tax”. Until 21 October 2025, a statement filed with the head of the tax office at least 5 days before the disposal was also a condition. It was removed by the Act of 12 September 2025 amending the Act on corporate income tax. The exemption does not apply where at least 50% of the value of the subsidiary’s assets consists, directly or indirectly, of real estate located in Poland or rights to such real estate (paragraph 3). The value of the assets is determined as at the last day of the month preceding the month in which the revenue is obtained (Article 3(4), applied accordingly).
In the ruling of 18 December 2025 cited above, the authority held that income from the sale of 100% of the shares to an unrelated purchaser after two years “will be exempt from taxation”.
Hypothetical example: price PLN 8,000,000, expenditure on acquiring the shares PLN 5,000,000, income PLN 3,000,000. With the exemption the tax is PLN 0; without it, PLN 3,000,000 × 19% = PLN 570,000. With assets of PLN 10,000,000 and real estate of PLN 5,000,000, the share is PLN 5,000,000 / PLN 10,000,000 × 100% = 50%, so the exclusion already applies.
The authority may examine the purchaser’s links and the date of the asset test – prepare an analysis of links and a statement of assets as at the last day of the month before the disposal.
Mutual exclusion and comparison of the regimes
A PGK and the holding company regime do not operate in the same company, and moving from a group to the holding company regime requires two years without a PGK.
A holding company “is not a company forming a tax capital group” (Article 24m(1)(2)(b)); the same condition applies to the subsidiary (point 3(d)). Both are covered by the two-year requirement in paragraph 2, so after a PGK ends the exemptions under Articles 24n and 24o become available only after two years. The requirement covers all the conditions in paragraph 1(1)–(4), not only the 10% shareholding – we recommend planning on the basis of that wording.
Table. The PGK and the holding company under the law as at 23 September 2026
| Criterion | PGK | Holding company | Legal basis |
|---|---|---|---|
| Shareholding | Direct 75% in each subsidiary | Direct, at least 10%, on the basis of a title of ownership | Article 1a(2)(1)(b); Article 24m(1)(2)(a) |
| Other conditions | Average capital of PLN 250,000 or more; no arrears; no special economic zone exemptions | Genuine business activity; no shareholders from the countries under point (e); no special economic zone exemptions | Article 1a(2)–(2b); Article 24m(1) |
| Formalities and timing | Written agreement for at least 3 tax years; submission 45 days before the tax year; registration | No registration and, from 22 October 2025, no statement; two years of continuity of the conditions | Article 1a(2)(2) and (4)–(5); Article 24m(2); Article 24o |
| Benefit | Combining income and losses from the same source | Exemption of dividends and of income from the sale of shares to an unrelated purchaser | Article 7a(1); Article 24n(1); Article 24o(1) |
| Limitations | The group’s loss does not pass to the companies; losses from before the group up to 50% | Real estate making up 50% or more of the assets excludes the exemption on a sale | Article 7a(2)–(5); Article 24o(3) |
| Risk of loss of status | Breach of the conditions, including a change in composition outside paragraph 6 and a shareholding below 75% | Failure to meet any condition during the two-year period, including joining a PGK | Article 1a(6), (8a) and (10); Article 24m(1)–(2) |
| Consequence | Retrospective settlement with interest; 3 years without a new group | No holding exemption; another exemption possible, e.g., under Article 22(4) | Article 1a(10)–(10c) and (13); Article 22(4) |
The most common mistake
The most common mistake is to sell a subsidiary while the PGK is in existence, in the belief that the holding exemption will apply.
The parent company forms a PGK, so it is not a holding company, and the company being sold is not a subsidiary within the meaning of Article 24m. The income is subject to the 19% rate – in the example in the previous section, PLN 3,000,000 × 19% = PLN 570,000. Moreover, a company leaving the group or the shareholding falling below 75% breaches Article 1a(6) and (8a). The group loses its status on the day preceding the disposal, the companies settle tax retrospectively with interest, and for 3 tax years none of them may join another group.
Plan the exit two years ahead: end the PGK through the expiry of the agreement’s term or through an amendment that keeps the three-year minimum, maintain the holding company conditions for two years, and only then sell. If the transaction cannot wait and three of the group’s tax years have passed, end the group by an amendment before the disposal. You will pay 19% on the income, but you will avoid the retrospective settlement and the three-year bar.
Summary
- Define the group’s objective: combining income and losses points to a PGK, while exempting dividends and the sale of a subsidiary points to the holding company regime.
- Check the PGK conditions under the current Article 1a: average capital of at least PLN 250,000, a 75% shareholding, no arrears, a written agreement for at least 3 years, submission 45 days before the tax year.
- Assess every reorganisation within the PGK against Article 1a(6) and (8a), and calculate the retrospective settlement under paragraphs 10a–10c before you adopt a resolution.
- Keep a holding company record showing the date from which all the conditions of Article 24m(1) are met, with the evidence, including the ownership chain.
- Plan the sale of a subsidiary two years ahead: end the PGK through the expiry of the agreement, maintain the holding company conditions, and check the purchaser and the real estate among the assets.
Sources cited
All quotations from Polish-language sources — statutes, tax rulings and court judgments — are given here in the author's translation; the Polish wording is authoritative.
- Individual tax ruling of the Director of the National Revenue Information Service of 5 August 2026, no. 0111-KDIB1-1.4010.334.2026.1.SG – a company that does not confirm the absence of shareholders from the countries referred to in Article 24m(1)(2)(e) of the CIT Act is not a holding company and does not benefit from the exemptions under Article 24n(1) and Article 24o(1); the position held to be incorrect. https://eureka.mf.gov.pl/informacje/podglad/703988
- Individual tax ruling of the Director of the National Revenue Information Service of 18 December 2025, no. 0114-KDIP2-2.4010.501.2025.2.ASK – exemption under Article 24o(1) of the CIT Act of income from the sale of 100% of the shares in a domestic subsidiary to an unrelated entity after two years of meeting the conditions of Article 24m; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/671890
- Individual tax ruling of the Director of the National Revenue Information Service of 20 September 2024, no. 0111-KDIB1-1.4010.337.2024.2.AND – a holding company may exempt a dividend from a domestic subsidiary under Article 22(4) or Article 24n(1) of the CIT Act, but only on one of those bases; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/605879
- Individual tax ruling of the Director of the National Revenue Information Service of 26 March 2026, no. 0111-KDIB1-1.4010.37.2026.1.MF – an amendment shortening the agreement establishing the PGK while keeping the three-year minimum means that the group ends upon the expiry of the agreement’s term, without Article 1a(10)–(10c) of the CIT Act applying; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/684663
- Individual tax ruling of the Director of the National Revenue Information Service of 29 July 2026, no. 0111-KDIB1-1.4010.309.2026.3.KM – a merger by acquisition of a company from outside the PGK by a company forming the group does not result in the loss of taxpayer status if it does not breach the conditions of Article 1a of the CIT Act; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/702949
- Individual tax ruling of the Director of the National Revenue Information Service of 22 September 2025, no. 0114-KDIP2-1.4010.434.2025.2.PK – a division by separation of the parent company, with the shares in the subsidiaries transferred to a new company, results in the loss of PGK status because the catalogue of changes in Article 1a(6) of the CIT Act is closed; the position held to be incorrect. https://eureka.mf.gov.pl/informacje/podglad/659242
- Individual tax ruling of the Director of the National Revenue Information Service of 13 March 2025, no. 0114-KDIP2-1.4010.106.2025.1.JF – the five-year period for deducting a loss incurred before joining the PGK includes the group’s tax years (Article 7(6a) of the CIT Act); the position held to be incorrect. https://eureka.mf.gov.pl/informacje/podglad/630459
- Individual tax ruling of the Director of the National Revenue Information Service of 7 March 2025, no. 0111-KDWB.4010.140.2023.11.KKM, issued following the final judgment of the WSA in Warszawa of 17 July 2024, case ref. III SA/Wa 1121/24 – failure to achieve the profitability ratio under the law in force until 31 December 2021 resulted in the loss of PGK status by operation of law, and a later correction of the return does not restore it; the condition was repealed with effect from 1 January 2022; the position held to be incorrect. https://eureka.mf.gov.pl/informacje/podglad/629894
- Individual tax ruling of the Director of the National Revenue Information Service of 22 June 2026, no. 0111-KDIB1-2.4017.17.2021.9.BD, issued following the judgment of the WSA in Warszawa of 26 January 2023, case ref. III SA/Wa 1137/22, and the judgment of the NSA of 5 February 2026, case ref. II FSK 638/23 – a PGK extended by an agreement concluded by the same companies retains the protection arising from rulings obtained in the previous period; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/696939
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Get in touch →Legal basis: Act of 15 February 1992 on corporate income tax (consolidated text: Dz.U. z 2026 r. poz. 554, as amended): Article 1a(1), (2), (2a), (2b), (4), (5), (6), (8), (8a), (9), (10), (10a)–(10c) and (13); Article 3(4); Article 7(5) and (6a); Article 7a(1)–(5); Article 11a(1)(3); Article 17(1)(34) and (34a); Article 19(1)(1); Article 22(4); Article 24a(3)(3)(b) and (c), and Article 24a(18); Article 24m(1) and (2); Article 24n(1), (3) and (4); Article 24o(1) and (3); Act of 29 October 2021 amending the Act on personal income tax, the Act on corporate income tax and certain other acts – repeal of Article 1a(2)(4) of the CIT Act with effect from 1 January 2022; Act of 25 June 2025 amending the Act on personal income tax and the Act on corporate income tax – repeal of Article 1a(2)(3)(b) of the CIT Act from 1 January 2026; Act of 12 September 2025 amending the Act on corporate income tax – amendment of Article 24o(1) and repeal of Article 24o(2) of the CIT Act from 22 October 2025.