Poland has rewritten its cash-payment tax-deductible cost rule in a newly promulgated amendment published as Dz. U. 2026 poz. 1371, reshaping how business taxpayers treat cash settlements and simplifying transfer-pricing obligations for the smallest companies. The amendment touches two areas that matter to almost every Polish business: the tax-deductibility of payments made outside a payment account for transactions falling under Article 19 of the Entrepreneurs’ Law (Prawo przedsiΔbiorcΓ³w), and the information micro and small enterprises must include in their transfer-pricing documentation.
The amendment follows the standard Polish legislative pattern under which most provisions enter into force a set number of days after publication, while certain provisions apply from a later date, with a transitional rule protecting invoices issued before that date. This article sets out the headline facts, the effective dates, worked examples, a comparison table, and a practical compliance checklist so that tax directors, accountants, CFOs and advisers can act before the deadlines bite. Because effective dates and the precise wording of the amending Act are critical, readers should verify the current text against the official sources cited below.
The core of the reform is simple: where a business makes a payment, or part of a payment, for a transaction covered by Article 19 of the Entrepreneurs’ Law without using a payment account, that part is generally not treated as a tax-deductible cost. This change is delivered through a rewrite of Article 22p of the Personal Income Tax Act (PIT) and its counterpart, Article 15d of the Corporate Income Tax Act (CIT). In parallel, the amendment eases the content of transfer-pricing information required from micro and small enterprises, a meaningful reduction of the compliance burden for smaller firms.
Who is affected? Any business taxpayer, sole trader, partnership or company, that purchases goods or services in B2B transactions above the statutory threshold set under Article 19 of the Entrepreneurs’ Law and settles any portion of them in cash is directly exposed to the deductibility rule. Micro and small enterprises stand to benefit from the lighter transfer-pricing reporting. Because of the staggered effective dates, the window to adapt internal processes is short, which is precisely why understanding this reform now matters.
The amendment was promulgated in the Journal of Laws (Dziennik Ustaw) as Dz.U. 2026 poz. 1371. Under standard Polish legislative practice reflected in the Act, most provisions enter into force a specified period after publication (commonly 14 days), while a defined set of provisions, including those governing the invoice-based transition, apply from a later date, typically aligned with the start of the following tax year. Because the exact dates are set out in the final text of the Act, taxpayers should confirm them against the official gazette entry rather than relying on secondary commentary.
The consolidated texts of the PIT Act, the CIT Act and the Entrepreneurs’ Law (Prawo przedsiΔbiorcΓ³w) can be read through the Internet System of Legal Acts (ISAP) maintained by the Sejm, and the official gazette entry is accessible through the Dziennik Ustaw portal. Advisers verifying the precise wording should anchor their analysis to those primary sources.
The structure of the amendment is deliberately staggered. The general framework, the substantive rewrite of Article 22p PIT and Article 15d CIT, and the changes affecting transfer-pricing information for micro and small enterprises, forms part of the body of changes that enter into force on the general date. However, the practical effect of the cash-payment deductibility restriction is calibrated to a later cut-off, so that businesses have a defined dividing line and are not penalised for transactions already invoiced under the old regime. In practice, this means firms should treat the deferred date as the operational deadline for aligning payment behaviour, while recognising that the law itself is already on the statute book from the general entry-into-force date.
The transitional provision is the single most important date detail for planning. Invoices issued before the cut-off date continue to be governed by the rule as it stood before Dz.U. 2026 poz. 1371. This grandfathering means that a transaction documented by an invoice dated before the cut-off is assessed under the previous deductibility standard, even if the cash element is settled afterwards. Conversely, invoices issued from the cut-off fall within the rewritten Article 22p PIT and Article 15d CIT. Businesses should therefore pay close attention to invoice dates around the transition, since the invoice date, not merely the payment date, determines which rule applies.
The substance of the reform lies in the rewritten Article 22p of the PIT Act and the mirroring Article 15d of the CIT Act. Under the amended provisions, where a business taxpayer makes a payment relating to a transaction covered by Article 19 of the Entrepreneurs’ Law without using a payment account, the taxpayer may not include that portion of the expenditure in tax-deductible costs. The legal mechanism attaches the deductibility consequence directly to the method of payment: it is not enough that an expense is genuinely incurred and business-related; the manner of settlement must comply with the payment-account requirement for the covered transaction.
The rule does not prohibit cash payments as such, a business remains free to pay in cash, but it removes the tax benefit of doing so for transactions caught by the threshold. Where a payment is split, the restriction applies to the specific part that was settled without a payment account, rather than disqualifying the entire expense. The same logic applies for companies under Article 15d CIT, so that corporate and non-corporate taxpayers are treated consistently.
Article 19 of the Entrepreneurs’ Law sets the perimeter. It requires that settlements between entrepreneurs be made through a payment account where the transaction is a single business-to-business transaction whose value exceeds the statutory threshold, regardless of the number of payments made under it. In other words, the trigger is the value of the transaction as a whole, not each individual instalment. A transaction between two entrepreneurs that exceeds the threshold must be routed through a payment account to preserve full deductibility; cash settlement of a part of that transaction brings the rewritten Article 22p PIT or Article 15d CIT into play. Transactions below the threshold, and transactions with consumers rather than other entrepreneurs, fall outside this payment-account requirement.
Because the statutory threshold is set by law and can change, businesses should confirm the current figure against the up-to-date text of Article 19.
A payment account, for these purposes, is an account held with a bank or other payment service provider through which payment transactions can be executed, typically a business current account enabling transfers. The key is that the payment flows through an identifiable account rather than being handed over in physical cash. Bank transfers, and card or electronic payments that settle through such an account, generally satisfy the requirement. Physical cash handed between the parties does not. Because the deductibility outcome turns on this distinction, businesses should ensure that supplier payments above the threshold are routed through payment accounts and that the payment trail is documented.
Consider a Polish company buying machinery from another entrepreneur for a total that exceeds the Article 19 threshold. If the full amount is paid by bank transfer, the entire cost is deductible in the ordinary way. If the company instead pays part by transfer and settles the remainder in cash, the cash-settled portion is excluded from tax-deductible costs under the rewritten Article 15d CIT, while the transfer-settled portion remains deductible. A sole trader purchasing inventory in a single transaction above the threshold faces the identical analysis under Article 22p PIT.
The practical message is that any cash leakage on a covered transaction erodes deductibility proportionately, so splitting payments to accommodate a supplier’s preference for cash carries a direct tax cost once the rewritten rule applies.
Alongside the deductibility changes, the amendment eases transfer-pricing reporting for the smallest taxpayers. The relevant provisions of the PIT Act requiring the inclusion of certain general financial data in transfer-pricing information have been eased for micro and small enterprises. The consequence is that these firms no longer have to populate their transfer-pricing information with the general financial data of the entity that the previous rules demanded. This is a targeted simplification aimed at reducing the compliance burden on businesses least able to absorb it, while leaving the substantive arm’s-length principle intact.
Importantly, this relief sits alongside the cash-payment reform rather than replacing it. The same amending Act delivers both changes, so firms should read them together when assessing their overall compliance position.
The relief applies to enterprises meeting the Polish statutory definitions of micro and small enterprises under the Entrepreneurs’ Law, which broadly align with the European framework for the SME category. Classification turns on headcount and financial thresholds measured over the relevant period, the number of employees and either turnover or balance-sheet totals. A micro-enterprise occupies the smallest tier of the category, with a small enterprise sitting immediately above it. Businesses should confirm their status against the applicable thresholds for the relevant financial year, because eligibility for the transfer-pricing relief depends on properly meeting the definition; a firm that outgrows the small-enterprise bracket loses access to the simplified reporting.
The relief removes a specific data element; it does not abolish transfer-pricing documentation. Micro and small enterprises that fall within the documentation obligation must still prepare and submit their transfer-pricing information and comply with the underlying requirement to set intercompany terms on an arm’s-length basis. What changes is the content: the entity’s general financial data no longer needs to be included in the transfer-pricing information. Firms should therefore continue to maintain records demonstrating the arm’s-length nature of controlled transactions, identify related-party dealings accurately, and meet the filing obligations that remain, while adjusting their templates accordingly. The OECD Transfer Pricing Guidelines remain a useful reference for the substantive arm’s-length analysis that continues to apply.
Take a small manufacturing company that buys components from a related entity. Previously, its transfer-pricing information had to carry the general financial data block for the reporting entity. Under the amended rules, that block can be removed from the submission for a qualifying micro or small enterprise. The intercompany transaction details, the method used to determine the price, and the comparability analysis supporting the arm’s-length conclusion all remain. In practical terms, the finance team updates its reporting template by removing the general financial data section and verifies that the firm genuinely meets the micro or small enterprise definition before relying on the relief.
Because the cash-payment rule has a defined transition, the period before the deferred date is the window to prepare. The actions below are organised around the two effective dates and the core functions affected: invoicing, payments, contracts, controls and training.
Before the general entry into force (as the law takes effect):
Before the deferred date (the operational deadline):
Documentation is the practical defence against a later disallowance. For every covered transaction, retain the invoice, the bank transfer confirmation or electronic payment record, and evidence that the full amount was settled through a payment account. Where a payment is made in instalments under a single transaction above the threshold, keep records showing each instalment was routed through an account, since the Article 19 test looks at the transaction as a whole. A clean, auditable payment trail linking the invoice to account-based settlement is the simplest way to demonstrate that the expenditure qualifies as a tax-deductible cost under the rewritten Article 22p PIT or Article 15d CIT.
Supplier contracts should reflect the new reality. Where existing agreements permit cash settlement, consider amending them to require payment by bank transfer for any transaction above the Article 19 threshold. A short communication to suppliers can set expectations: explain that the business will settle covered transactions only through a payment account, and request bank details and compliant invoicing. For recurring or framework arrangements, build the payment-account requirement into standard terms so that each order under the framework is captured. This protects deductibility and reduces the risk of disputes when a supplier expects cash.
The table below summarises how the reform changes the position across the dimensions that matter most for planning. It contrasts the position before Dz.U. 2026 poz. 1371 with the amended regime, and highlights the transitional treatment of invoices and the transfer-pricing easing for smaller firms.
| Aspect | Old rule (before Dz.U. 2026 poz. 1371) | New rule (Dz.U. 2026 poz. 1371) |
|---|---|---|
| Statutory provision | Original wording of Article 22p PIT / Article 15d CIT | Rewritten Article 22p PIT / Article 15d CIT |
| Payment requirement | Prior deductibility treatment for payments made without a payment account | The part of a payment made without a payment account, for transactions under Article 19 of the Entrepreneurs’ Law, is not tax-deductible |
| Effective date | N/A | General entry into force on the date set in the Act; certain provisions deferred to a later date |
| Invoices issued before the cut-off | Apply the old rule | Old rule continues to apply to those invoices |
| Transfer-pricing reporting (micro/small) | Required to include general financial data | General financial data no longer required for micro and small enterprises |
Audit attention can be expected to concentrate on cash-heavy supply chains and informal settlement practices, precisely the behaviour the reform targets. Where a covered transaction is settled in cash, the likely practical effect is a disallowance of the cash-settled portion, increasing the taxpayer’s taxable base and triggering additional tax, with the possibility of interest on any resulting arrears. Record-keeping exposure is significant: a business that cannot evidence account-based settlement of a covered transaction risks losing the deduction even where the expense was genuine.
Taxpayers retain the usual administrative remedies, including the ability to challenge an assessment through the standard appeal routes under the Tax Ordinance Act, but prevention through disciplined payment practices is far cheaper than contesting a disallowance after the fact. Firms with robust payment policies and clean documentation are best placed to navigate the new regime, while those reliant on cash settlement of large transactions face the greatest exposure.
These conservative illustrations show how the deductibility allocation and the transfer-pricing easing play out in practice.
Scenario one, split payment on a covered transaction. A company incurs an expense of 100,000 zΕ on a single B2B transaction above the Article 19 threshold, invoiced after the cut-off date. It pays 70,000 zΕ by bank transfer and 30,000 zΕ in cash. Under the rewritten Article 15d CIT, the 70,000 zΕ settled through a payment account is deductible, while the 30,000 zΕ cash portion is excluded from tax-deductible costs. The deductible amount is therefore 70,000 zΕ rather than the full 100,000 zΕ.
Scenario two, the invoice-date transition. The same company incurs an identical 100,000 zΕ expense but the invoice is dated before the cut-off. Because the invoice was issued before the cut-off, the transitional rule preserves the old treatment for that invoice, even if part of the payment is made in cash afterwards. This illustrates why invoice timing around the transition is decisive.
Scenario three, transfer-pricing simplification. A small enterprise with controlled transactions previously filed transfer-pricing information including a general financial data block. For its reporting under the amended rules, it confirms it still meets the small-enterprise thresholds, adjusts the general financial data fields in its template, and retains the transaction details, pricing method and comparability support. Its filing is lighter, but the arm’s-length substance it must demonstrate is unchanged.
Because the reform has a defined runway before the deferred date, the practical priority for every Polish business is to eliminate cash settlement of transactions covered by Article 19 of the Entrepreneurs’ Law and to build an auditable payment-account trail for each covered expense. Finance teams should update supplier contracts, manage invoice dating around the transition, and embed a payment-account policy supported by internal controls and staff training. Micro and small enterprises should take advantage of the lighter transfer-pricing reporting by adjusting the general financial data fields in their templates, while confirming they genuinely meet the thresholds.
Given the interplay between the rewritten Article 22p PIT, Article 15d CIT and the transfer-pricing changes, businesses facing material exposure should seek a review by Polish tax counsel before the deadlines take effect, and should verify the current statutory text and effective dates against the official sources.
This article is general information and not a substitute for advice on your specific circumstances; consult a qualified Polish tax adviser before acting.
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