The beginning of the year is a time when it’s worth paying special attention to several important tax issues. We remind you of key deadlines related to: settlements concerning withholding tax (WHT), the possibility of choosing depreciation rates, as well as the option to use simplified CIT advances and the obligation to pay local taxes.
WHT, choice of depreciation rates, simplified CIT advances, local taxes, VAT coefficient true-up
WHT reporting obligations
The beginning of the year is the time when taxpayers must fulfil their reporting obligations for 2025 regarding WHT, as key deadlines related to withholding tax (WHT) are approaching.
The earliest deadline is the end of January 2026, by which taxpayers must submit the CIT-10Z form – a declaration of the withheld tax amount, to the tax office.
Other obligations include:
- IFT-1R – information about the income of non-resident individuals, to be submitted to the tax office by the end of February 2026, even if no tax was withheld.
- IFT-2R – information about the income of foreign entities, to be submitted to the tax office by the end of March 2026, even if no tax was withheld.
- IFT-2 – submitted at the taxpayer’s request within 14 days from the submission date to the taxpayer and to the tax office.
- WH-OSC – the deadline for submitting a subsequent WH-OSC declaration for withholding tax (WHT) payers expires on 31 January 2026.
Verification of tax residency certificates
The beginning of the year is the best time to check the validity of tax residency certificates from foreign contractors. These certificates are essential for applying preferential tax rates or exemptions resulting from double tax treaties or other tax regulations. The absence of a valid certificate will prevent their application.
Remember that:
- A certificate is valid for 12 months from the date of issuance, unless another period is specified.
- If there is a change in the tax residency, the taxpayer must promptly provide a new document.
- The lack of an up-to-date certificate may result in tax liability for the payer.
It’s worth acting now and ensuring that the certificates you have are current so you can prepare the correct declarations on time.
Election of simplified income tax advance payments
The beginning of the year is a good time to consider opting for the simplified method of paying CIT advance payments, in accordance with Article 25(6) of the Corporate Income Tax Act. Under this method, advance payments amount to 1/12 of the tax due shown in the CIT-8 return filed for the preceding tax year, or – if no such return was filed – for the tax year two years prior. If no tax was due in either of these periods, this method cannot be applied.
A taxpayer who chooses this method begins making advance payments calculated accordingly. The choice is binding for the entire tax year, and advance payments are made by the 20th day of each month for the preceding month. Therefore, the decision to opt for this method should be made before the deadline for paying the advance payment for January of that year—i.e. by 20 February 2026.
The choice of simplified advance payments must be reported to the head of the competent tax office in the annual tax return filed for the given tax year (there is no requirement to notify the tax office at the time the decision is made).
Choice of depreciation rates
At the beginning of the year, it is worth considering the possibility of changing depreciation rates for fixed assets, according to Article 16i(5) of the CIT Act. The rate can be reduced starting from the month the asset is entered into the register or from the first month of the new tax year.
The decision to change the rate must be made at the latest before the first depreciation write-off in the given year. Depending on the frequency of depreciation write-offs, the rate adjustment can occur starting from January of that year, at the end of the first quarter, or at the end of the year, if the taxpayer makes lump-sum depreciation write-offs.
Reducing the rate results in lower costs and an increased tax base, which can be beneficial for businesses incurring losses. By lowering the rates during loss years and returning to higher rates during profitable years, the taxpayer can more effectively manage their tax costs.
Local taxes
The DN-1 property tax return must be submitted by the end of January 2026.
In addition, legal entities are required to submit a return (DR-1) for agricultural tax and forest tax (DL-1) by 15 January 2026.
VAT coefficient true-up
At the end of the year for which the taxpayer was entitled to reduce the amount of tax due by the amount of input tax, the taxpayer is required to adjust the amount of tax deducted for the completed tax year. This adjustment is made by calculating the proportion ratio according to the actual data for the year to which the input VAT adjustment relates.
How can we help?
We would be happy to assist you with any matters related to the discussed topics. Our team offers support in areas including:
- verification of reporting obligations regarding WHT and assistance in completing them in accordance with applicable regulations, including the analysis of tax residency certificates,
- consultations on choosing simplified income tax advances, along with an assessment of their tax efficiency in the long term,
- analysis of potential benefits from changing the depreciation method for owned fixed assets and providing advice in this regard.
We invite you to contact us. We are here to make running your business easier.
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