Poland’s proposed changes to the CIT Act — which would exclude from tax‑deductible costs a wide range of intangible services provided by shareholders, directors, and other related individuals — may feel sudden. In reality, they are part of a much longer global trend. For more than a decade, tax authorities worldwide have been tightening the rules around related‑party management services, advisory fees, and other intangible charges.

To understand where Poland is heading, it helps to understand how we got here — and why management charges became such a persistent target for regulators.

1. The historical problem: intangible services are hard to verify

Management services have always been difficult for tax authorities to audit. Unlike physical goods or operational services, intangible activities such as:

• strategic advice,
• oversight,
• management support,
• business development,
• or “services of a similar nature”

leave no physical trace. Documentation is often subjective, and the economic value is hard to benchmark.

This created a structural vulnerability: the same invoice could represent genuine value — or pure profit extraction. Tax authorities could not reliably tell the difference.

2. The BEPS era: intangible services under global scrutiny

The OECD’s Base Erosion and Profit Shifting (BEPS) initiative (2013–2015) identified related‑party intangible services as one of the easiest ways to shift profits across borders. BEPS introduced concepts such as:

• the benefit test,
• arm’s‑length pricing,
• substance over form,
• and the prohibition of shareholder activities being charged to subsidiaries.

Countries began tightening their rules — but each in its own way.

3. How other countries responded

Poland is not alone. Similar developments have unfolded across major jurisdictions:

United Kingdom — IR35 and disguised employment

The UK targeted individuals invoicing through personal service companies while effectively acting as employees. The logic is similar to Poland’s: if you behave like an employee or director, you should be taxed like one.

Germany — strict transfer pricing and “shareholder activity” doctrine

German tax authorities routinely reclassify management fees as non‑deductible profit distributions if they overlap with governance duties or lack clear economic benefit.

Netherlands — substance requirements

Management fees remain deductible only when the service provider has real substance and the service is clearly documented and benchmarked.

Australia and Canada — aggressive audits and “reasonableness” tests

Both countries frequently deny deductions for related‑party management fees unless the taxpayer can prove necessity, benefit, and market value.

Across jurisdictions, the pattern is consistent: intangibles + related parties = high‑risk area.

4. Poland’s proposal: a decisive, domestic‑focused approach

The Polish draft goes further than many international counterparts by:

• targeting domestic related individuals,
• disallowing entire categories of intangible services,
• applying a 5% ownership threshold,
• and offering only narrow exceptions (employment, board remuneration, resale, production necessity).

This is not a refinement — it is a structural redesign of how shareholder‑managers may interact with their companies.

The Ministry of Finance’s message is clear:

If you want to be paid for managing your own company, do it through employment or board remuneration — not through service invoices.

This is both a tax policy and a governance intervention.

5. Why management charges became a target

The global crackdown is driven by several long‑standing issues:

• Valuation ambiguity

There are no reliable market comparables for “strategic advice” or “management support”.

• Overlap with governance duties

Directors charging for what they should already be doing creates inherent conflict.

• Profit‑shifting potential

Management fees can reduce taxable profit in the company while shifting income to individuals taxed at lower rates.

• Administrative burden

Auditing intangible services consumes enormous resources, often leading to years of litigation.

• Lack of economic substance

In many cases, the service provider is the same person who owns or manages the company.

Given these challenges, many jurisdictions concluded that the enforcement cost outweighs the benefit. Poland is now taking the same view — but applying it broadly and domestically.

6. Governance implications for Polish companies

For many organisations — especially SMEs, family businesses, and founder‑led firms — the change is not just a tax issue. It affects:

• remuneration structures,
• shareholder agreements,
• board roles,
• and the division between ownership and management.

The reform pushes companies toward:

• employment contracts,
• formal board remuneration,
• managerial contracts taxed on the progressive scale.

This will require a shift from flexible, informal arrangements to transparent, documented governance structures.

7. The bottom line

Poland’s CIT proposal is part of a global movement — but executed with unusual decisiveness. Management charges became a target because they combine:

• tax risk,
• valuation uncertainty,
• governance ambiguity,
• and administrative complexity.

For companies, this means the era of flexible shareholder‑provided services is ending. The future belongs to:

• clear governance roles,
• formal remuneration structures,
• and robust documentation of economic substance.

My colleagues at Grupa Strategia will continue to monitor the legislative process and support clients in adapting their governance and remuneration models to the new regulatory landscape. Should you wish to receive professional advice and tax planning for your international Group with branches in Poland to see how your current or expected practice will be affected by the coming changes in Poland, please email david.james@grupastrategia.com