Poland is one of the fastest-growing economies in Central and Eastern Europe, but behind the opportunities lies a significant challenge: one of the world’s most complex tax systems. According to PwC’s 2024 report “Podatki pod lupą”, Poland ranks 63rd out of 64 countries in the Tax Complexity Index – basically only Peru is worse.

For international businesses planning to expand into Poland, understanding these risks is quite important.

Complexity by the Numbers

• Second most complex tax system in the world (Tax Complexity Index 2022, covering 64 countries).

• 334 hours per year: the average time Polish businesses spend on tax compliance (compared with 132 in Denmark, 134 in France, 218 in Germany, and just 50 in Estonia).

• 2.4% of turnover: the average cost of corporate tax compliance in Poland—the second highest in the EU after Cyprus (2.6%). For comparison, Denmark is at 1.5%, France 1.8%, Germany 1.9%.

• High volatility: dozens of legal changes in recent years, including major reforms such as the Polish Deal (Polski Ład) and the National e-Invoicing System (KSeF).

This level of complexity means that foreign companies must dedicate more resources to compliance in Poland than in most European markets.

Why So Difficult?

PwC highlights several reasons behind Poland’s ranking:

1. Frequent changes in tax law — in CIT alone, rules on thin capitalization, withholding tax, and minimum tax have changed repeatedly in the last five years.

2. Ambiguity in interpretation — many provisions lack clear guidance, leading to court disputes.

3. Administrative burden — companies must invest in IT systems, additional staff, and external tax advisors.

4. Personal liability — unlike in some countries, the individual signing the tax return may face criminal tax liability in Poland.

Lessons from Other Markets

Estonia shows the opposite approach: a transparent, digital-first tax system, where compliance takes less than 50 hours a year. Businesses there face lower administrative costs and greater predictability.

This comparison matters: Poland’s high compliance costs do not just affect cash flow—they can slow down market entry and limit the competitiveness of new entrants.

Opportunities Amid Challenges

Despite the heavy tax burden, Poland offers a large consumer market of nearly 38 million people, EU membership, and strong economic fundamentals. Many global companies continue to expand successfully, provided they prepare properly.

Best practices for new entrants include:

• Partnering with local tax experts who understand both Polish and EU law.

• Implementing tax technology and automation tools to handle reporting requirements.

• Creating strong internal governance to manage risks of personal liability.

• Allowing flexibility in financial planning to adapt to frequent regulatory changes.

The Strategic Takeaway

For business leaders, the message is clear: Poland is a rewarding but demanding market. Companies that underestimate the complexity of its tax system risk delays, disputes, and unnecessary costs. Those that prepare with the right expertise and systems in place, however, can turn compliance discipline into a competitive edge.