Tax Due Diligence in Poland — Check Before You’re Checked

The difference is fundamental. An inspection searches for errors to punish them. Tax due diligence searches for errors to fix them. In the first case, you are a party to proceedings. In the second, you are the client who sets the scope and pace.

There is an old saying among surgeons: the best operation is the one you managed to avoid. In taxation, the analogy runs: the best inspection is the one you came to prepared. And the only way to prepare is to know what the Polish tax authority might find—before it finds it.

What We Actually Examine

Tax due diligence is a technical review of a company seen through the lens of Polish tax law. But “technical review” sounds banal, and the procedure is not.

We begin with documentation—invoices, contracts, ledgers, declarations. This is the base layer: do the numbers match, were deadlines met, were formal requirements under Polish tax regulations satisfied. Most errors reveal themselves here—not because entrepreneurs are dishonest, but because the system is complicated and attention is scattered among a thousand other concerns.

Then we go deeper. We examine transactions: were they correctly classified under Polish CIT, PIT, and VAT rules, were tax consequences recognized at the proper moment, does the documentation reflect the actual course of events. Here the difficulty begins—because Polish tax law operates with concepts that require interpretation, and interpretations tend to be fluid.

Finally—and this is the level many auditors skip—we examine structures and processes. Not just “is this particular transaction correct,” but “does the way the company operates generate systemic risk.” The Polish general anti-avoidance rule (GAAR) does not concern individual errors; it concerns schemes that look legal in their details but, taken as a whole, serve primarily to avoid tax. This kind of risk is visible only from a distance.

VAT Due Diligence — A Concept That Can Cost a Fortune

For several years now, Polish tax law has operated with a concept that changes the rules of the game: due diligence in the selection of business partners. In practice, this means you can lose the right to deduct VAT not because you did something wrong yourself, but because your counterparty turned out to be dishonest—and you did not verify them carefully enough.

This transfer of responsibility is deeply unfair, but it is a fact. Polish tax authorities can challenge your deductions if they conclude that you should have known you were participating in a transaction chain involving a fraudster. And “should have known” is a category the authority defines after the fact, from the perspective of someone who already knows how the story ends.

This is why part of tax due diligence in Poland involves verifying procedures—whether the company has implemented mechanisms for checking counterparties, whether those mechanisms are applied consistently, whether documentation exists to confirm their application. This is not bureaucracy for its own sake. It is building a line of defense in case someone you traded with turns out not to be who they claimed to be.

When Tax Due Diligence Makes Sense

Not always. Tax due diligence costs—time, money, management attention. There is no point in conducting one every quarter or on principle. But there are moments when it becomes almost indispensable:

Before a major transaction. If you are selling the company, merging with another, contributing assets to a new structure—the buyer will conduct due diligence. Better that you know what they will find before they find it. And if they find problems you could have fixed earlier, you will lose on valuation or lose the deal entirely.

After a period of rapid growth. Companies that grow fast often grow chaotically. Processes that worked with ten transactions a month do not work with a thousand. Documentation falls apart, deadlines slip, people take shortcuts. Tax due diligence allows you to stop and check what was left behind along the way.

When Polish tax regulations have changed. Polish tax law changes constantly. Sometimes the changes are cosmetic; sometimes they turn entire areas of accounting upside down—as with the Polish Deal reforms or mandatory e-invoicing (KSeF). If your company operates in an industry affected by a major reform, it is worth checking whether you adapted correctly.

When you have a bad feeling. This sounds unserious, but it is not. Entrepreneurs often sense that something is wrong before they can name it. If you wake up at night thinking about taxes, perhaps it is worth investigating—rather than waiting for Polish tax authorities to investigate for you.

The Report from Taxt Due Dilligence and What Comes After

Tax due diligence concludes with a report. The document indicates what is in order, what requires correction, what constitutes risk. But the report is not the end—it is the beginning.

Some findings require immediate action: amended declarations filed with Polish tax offices, additional tax payments, repaired documentation. Some require systemic changes: implementing procedures, training staff, reorganizing processes. Some require only awareness: this is an area of risk, particular caution is needed here.

A good tax due diligence report is not a list of accusations. It is a map—it shows the terrain, marks the obstacles, indicates the paths. What you do with that map is up to you. But at least you know where you stand.

Tax Due Diligence Versus Tax Inspection

There is a certain asymmetry in the relationship between taxpayer and Polish tax authority worth keeping in mind. The authority has access to information you do not—data from your counterparties, from banking systems (STIR), from other agencies, from the Central Register of Beneficial Owners (CRBR). It knows things you do not know it knows.

Tax due diligence does not fully equalize this asymmetry—that is not possible. But it gives you something valuable: knowledge of yourself. You know what is in your books. You know where the weak points are. You know what to answer if the authority asks.

In tax disputes with Polish authorities—as in most conflicts—the better-prepared party wins. Preparation begins with knowledge. And knowledge begins with questions you ask yourself before someone else asks them.