When a shareholder provides services to their own company in a B2B model, tax treatment in Poland has long raised disputes. Authorities often deny access to lump-sum taxation or the 19% flat tax, alleging optimisation. Now, the legislator steps in: the UD116 package proposes a 17% lump-sum tax on services rendered to related parties. Is this the end of years of conflict—and a formal green light for the “dual role” of shareholder-manager?.
Shareholder provides services to their own company — the background
Issuing invoices to one’s own company by a board member or shareholder means the owner/manager performs services under a B2B sole proprietorship for that same company. This model has been popular due to potential access to 8.5% lump-sum or the 19% flat PIT.
The issue is not new. Entrepreneurs have sought legal certainty, while tax authorities have looked for ways to treat such shareholder-to-company services as purely tax-driven. On our blog we have tracked this shift and the widening scepticism of the authorities:
Tax practice has also stretched the meaning of “managerial” tasks, frequently including activities such as client relationship maintenance, contractor sourcing, and marketing efforts. In effect, even these “soft” services are often viewed as part of the board member’s function, not a separate B2B stream—further narrowing room for shareholder-to-company services. We discussed this as well in the post below:
Legal change on the table: 17% lump-sum for related parties (UD116)
The widely discussed government package to amend PIT and CIT (UD116) contains a sealing measure directly targeting this area. Under the draft, the lump-sum on recorded revenues would introduce a 17% rate whenever services are rendered to related parties.
A recent Prawo.pl article carried expert remarks by dr Piotr Sekulski on the proposed change. In the context of UD116, he noted:
tax advisor Piotr Sekulski, PhD
„Although the change may appear unfavourable, the Ministry of Finance may thus bring to a close the long-standing disputes over the settlement of board members who combine management contracts with providing services to their own company. Recall that in recent years the tax authority has refused to combine management contracts (taxed on the scale—12% and 32%) with advisory services taxed under the lump-sum. The Director of the National Tax Information refuses individual rulings in such cases due to suspected impermissible optimisation. Therefore, if a person plays a dual role in the company—combining management with services taxed under the lump-sum—they risk a dispute with the tax office. In an audit, the authority may demand that all company-derived income be taxed under the scale. Meanwhile, the MF’s proposal would ‘legalise’ the dual role of a board member—but at a higher lump-sum rate.”
Full article available here.
How we can hepl?
If you have questions about situations where a shareholder provides services to their own company, let’s talk. Describe your facts and concerns—we will review your contracts, roles, and settlements, explain the implications, and discuss risk-mitigation options tailored to your case.
For support in structuring your relationship with your own company, visit www.outsourced.pl
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