The lump-sum tax on company income lets you pay no CIT for as long as the profit stays in the company. Check the conditions, the deadlines and when switching really pays off.
Estonian CIT, i.e. the lump-sum tax on company income (ryczałt od dochodów spółek), changes when the tax is paid: instead of making monthly advance payments on profit, the company pays tax only when it distributes profit to its shareholders. For businesses that invest and keep money in the company, this is a real cash saving.
Who can use it
- limited liability companies (sp. z o.o.), simple joint-stock companies, joint-stock companies, as well as limited partnerships and limited joint-stock partnerships,
- whose shareholders are exclusively natural persons,
- which employ at least 3 people (other than the shareholders) — under employment contracts or civil-law contracts with appropriate remuneration,
- whose passive income (e.g. interest, rent, sale of receivables) does not exceed income from operating activities,
- which do not hold shares in other companies.
How much is the tax
Under the lump-sum regime the rate is 10% for small taxpayers and businesses starting operations, and 20% for others. When a dividend is paid, the shareholder pays income tax but can reduce it by part of the lump-sum tax paid by the company. The total burden is usually lower than under classic CIT with a dividend — provided the company does not pay out profit immediately after earning it.
How to switch from 1 January 2027
- Check the conditions — shareholders, employment, types of income.
- Prepare the financial statements as at the end of 2026 and determine the equity as at the switch date.
- File the ZAW-RD notification with the tax office by the end of the first month of the tax year — for a calendar tax year, by 31 January 2027.
When it does not pay off
When the shareholders pay out the entire profit every year, when the company has large losses to carry forward, or when it cannot maintain the required employment. That is why, before you file anything, it is worth calculating both options using your company's figures — we do this as part of a free consultation.
