Poland revises PIT brackets and raises corporate taxes to manage public debt

Restructuring personal income tax brackets

On 29 September 2026, the Polish Council of Ministers approved a draft tax bill modifying the personal income tax scale. The reform raises the initial 12% income bracket threshold from 120,000 PLN to 130,000 PLN. It introduces an intermediate bracket of 24% on personal income between 130,000 PLN and 150,000 PLN, while the highest 32% rate will now apply only to income exceeding 150,000 PLN. The tax-free allowance remains unchanged at 30,000 PLN. According to government projections, the share of taxpayers subject to the 32% rate will decline from 14% to 7.2% in 2027. Approximately 3.5 million taxpayers are expected to benefit, with annual tax savings reaching up to 3,600 PLN for individuals earning at least 150,000 PLN annually.

Corporate levies and closing tax loopholes

To offset the reduction in personal income tax revenues, the government approved increases on higher earners and large corporations. The standard corporate income tax rate for companies with annual revenues exceeding 50 million euros will rise from 19% to 22%, excluding commercial banks. For individuals with the highest incomes, the solidarity levy increases from 4% to 5%, affecting approximately 39,000 taxpayers based on 2024 revenue figures. The government also lowered the revenue cap for the lump-sum tax regime from 2 million euros to 250,000 euros, imposing a 17% rate on revenue exceeding 300,000 euros. Further adjustments target family foundations, raising their payout tax rate from 15% to 19% and introducing a mandatory two-year asset-holding period before tax preferences apply.

Energy subsidies and public revenue impact

The legislative package also introduces electricity subsidies covering up to 50% of power costs for energy-intensive enterprises. This support is funded by a temporary corporate income tax increase on large energy, fuel trade, and extraction corporations generating over 50 million euros in revenue. Under this schedule, the tax rate rises to 30% in 2027, decreases to 26% in 2028, falls to 23% in 2029, and returns to the baseline in 2030. In addition, the cabinet revived the sugar fee bill previously vetoed by President Karol Nawrocki, directing 96% of proceeds to the National Health Fund. Over a ten-year horizon, the Ministry of Finance projects state budget tax revenues will decrease by 57.7 billion PLN, while overall public sector receipts will rise by nearly 26.5 billion PLN through gains in health and local municipal funds.

Rising debt and fiscal sustainability warnings

Alongside tax revisions, the government adopted the public debt management strategy spanning 2027 to 2030. State public debt is forecast to rise from 55.3% of GDP in 2026 to 55.9% in 2027, reaching 58.6% in 2028 and peaking at 59.2% in 2029 before easing to 58.3% in 2030. Finance Minister Andrzej Domański acknowledged the potential of crossing the statutory 55% debt threshold in 2028, which would mandate fiscal austerity procedures for the 2030 budget. Under European Union methodology, general government debt is projected to climb from 67.6% of GDP in 2026 to 76.6% in 2030. Economists at PKO BP noted that the general government deficit is projected at 7.1% of GDP across 2026 and 2027, following a Moody's credit rating downgrade.

As we signaled at this time last year, in 2028 there is a probability of exceeding the threshold included in the Public Finance Act, that is 55 percent of GDP.