Poland remains one of Central Europe’s most attractive investment destinations, supported by a large domestic market, a skilled workforce, and an increasingly sophisticated business environment. At the same time, the Polish tax administration has become more data-driven, with authorities using advanced analytical tools to identify risks and focus their verification activities more precisely. The practical implication is that tax governance and proactive compliance have become increasingly important elements of successful business operations.
These conclusions are drawn from the second edition of the report Businesses Under the Tax Authorities’ Microscope: The Challenging Relationship Between Taxpayers and Tax Authorities, prepared by MDDP in cooperation with the Polish Lewiatan Confederation. The report provides a unique insight into how tax audits are evolving in Poland and highlights the areas currently attracting the greatest attention from the tax authorities.
For international groups entering or expanding in Poland, understanding where tax authorities are concentrating their attention can help create an effective roadmap for managing tax risks before they become disputes.
Start with VAT: the first line of defence
VAT remains the primary area of interest for the Polish tax administration. Today, tax authorities have access to extensive transactional data through digital reporting tools, including SAF-T reporting (JPK), online cash registers, and the National e-Invoicing System (KSeF). This allows irregularities to be identified much faster than in the past.
For businesses, this means that VAT compliance should be treated as a continuous process rather than a year-end exercise. Companies should ensure consistency between commercial documentation, invoicing, accounting records, and tax reporting. Particular attention should be given to VAT refund positions and transactions in sectors traditionally viewed as higher risk, such as construction, transport, and e-commerce.
The key lesson is straightforward: robust data quality and real-time monitoring of transactions are becoming as important as technical tax analysis.
Review cross-border structures through a corporate income tax lens
Corporate income tax is another area receiving growing attention from the tax authorities. According to recent observations, audits increasingly focus on multinational groups and taxpayers reporting tax losses. This reflects a broader interest in understanding how cross-border business models operate in practice and whether profit allocation mechanisms accurately reflect commercial reality.
Foreign investors should therefore periodically review the business rationale behind their Polish operating structures, intercompany transactions, and financing arrangements. Documentation alone is unlikely to be sufficient if it is not supported by the actual functioning of the business. Tax authorities are increasingly interested in substance and operational reality rather than formal compliance only.
Make withholding tax compliance a strategic priority
Withholding tax (WHT) remains one of the most challenging areas of Polish taxation and continues to generate significant controversy. Tax authorities pay particular attention to beneficial ownership, economic substance, and the decision-making autonomy of foreign recipients of payments. They also increasingly assess whether the Polish payer has exercised sufficient due diligence before applying treaty benefits or domestic exemptions.
For international groups, WHT compliance should therefore go beyond collecting standard tax residency certificates. Businesses should maintain a clear understanding of the activities, functions, and substance of foreign counterparties receiving payments from Poland. The stronger the documentation and supporting evidence, the lower the likelihood of future disputes.
Do not overlook payroll and personal income tax requirements
The nature of personal income tax verification has also evolved. Authorities increasingly rely on large-scale data analytics and verification activities focused on business income, employer withholding obligations, and foreign-source income. Improved information exchange between tax administrations further enhances the effectiveness of these reviews.
For employers, especially multinational organisations, this highlights the importance of reviewing payroll compliance, expatriate taxation policies, and reporting obligations related to internationally mobile employees. Cross-border workforce management is becoming an area where preventive compliance can significantly reduce future exposure.
Ensure consistency in transfer pricing
Transfer pricing audits may be less frequent than in previous years, but they have become more targeted, specialised, and data-driven. Authorities increasingly compare information reported across multiple sources, including TPR filings (Poland’s transfer pricing information returns), transfer pricing documentation, accounting records, and financial statements. They focus particularly on transactions involving goods and services and on margin-based methods, including the transactional net margin method.
As a result, multinational groups should focus on consistency rather than documentation alone. Any discrepancy between transfer pricing documentation, reported data, and real business operations may attract attention. It is also worth remembering that once a risk area is identified, authorities may revisit the same taxpayer in subsequent years.
Build tax governance before issues arise
The overall picture emerging from current audit trends is that tax verification has become a routine aspect of doing business in Poland. Authorities increasingly use data analytics to identify specific risks and focus resources where they expect irregularities to exist.
For foreign investors, the most effective strategy is therefore not reactive defence but proactive governance. Companies that regularly review tax processes, monitor data consistency, document business substance, and address potential risks before an audit are likely to be far better positioned to manage interactions with the tax authorities.
The findings of the MDDP and Lewiatan report point to a clear trend: successful tax risk management in Poland increasingly depends on transparency, consistency, and early action. Businesses that combine growth ambitions with robust tax governance can continue to invest with confidence, while reducing the likelihood of disputes and creating greater certainty for their Polish operations.
