A tax advisor specializing in transfer pricing and corporate income tax. Author of numerous tax commentaries and opinions published in industry publications and expert websites.
Windfall tax in Poland - key features of the draft legislation and major concerns
On 29 May 2026, the draft legislation introducing a so-called windfall tax was published on the website of the Government Legislation Centre. The proposed measure follows the trend observed in recent years of taxing extraordinary economic rents generated in the energy sector. However, its design - particularly the retroactive application of the tax - raises significant constitutional and practical concerns.
Below, we outline the key features of the draft legislation and the principal areas of legal risk.
Who will be subject to the tax?
The scope of the proposed tax is relatively narrow and is limited exclusively to the fuel sector. Taxpayers would include entities engaged in:
- the production of liquid fuels (through crude oil refining processes); and
- the trading of liquid fuels (including imports and intra-Community acquisitions), provided that they hold the relevant licence authorising the international trade in fuels.
In practice, the measure is expected to affect a relatively small group of the largest market participants - estimated at approximately 20–30 entities operating in Poland.
When will the tax be introduced?
The draft legislation provides for the Act to enter into force on 1 August 2026. At the same time, the tax would apply to income earned earlier, namely during the period from 1 March 2026 to 31 December 2026.
Consequently, the first advance tax payment would cover several months retrospectively and would be due by 25 August 2026.
How will the tax mechanism operate?
The draft introduces a relatively complex mechanism for identifying “extraordinary profits”.
The tax base would consist of the excess of actual revenues generated from fuel sales over hypothetical revenues, i.e. revenues that the taxpayer would have earned under a “normal” profit margin.
Hypothetical revenues are determined using a so-called reference margin, calculated on the basis of the taxpayer’s historical average margin and increased by 20%, subject to a minimum margin of 2%.
The purpose of this mechanism is to tax only the portion of earnings that exceeds the level regarded as “normal”.
The tax rate is set at 75% of the tax base.
In practice, this results in a very substantial marginal tax burden on excess profits derived from fuel sales, albeit only on the portion exceeding the reference threshold.
How will the tax be settled?
The tax would be paid through monthly advance payments on a cumulative basis by the 25th day of the following month and would be subject to an annual settlement by 30 April 2027.
At the same time, the legislator expressly excludes the possibility of treating the windfall tax as a tax-deductible expense for Corporate Income Tax (CIT) or Personal Income Tax (PIT) purposes.
Expected fiscal impact
According to the Regulatory Impact Assessment (RIA), the measure is expected to generate approximately PLN 5 billion in total revenue, including PLN 4.75 billion in 2026 and PLN 0.25 billion in 2027.
These revenues are intended to compensate the state budget for the cost of current relief measures, including reduced VAT and excise duty rates as well as fuel price intervention mechanisms.
Economic and policy rationale
The draft legislation refers to extraordinary market developments occurring in 2026, in particular:
- a sharp increase in crude oil prices (from approximately USD 65 to more than USD 120 per barrel);
- a significant rise in refining margins; and
- the simultaneous burden placed on consumers through elevated fuel prices.
According to the authors of the draft, part of the fuel sector generated profits constituting an economic rent, arising not from operational efficiency but from an external geopolitical shock.
The proposed tax is therefore intended to serve redistributive, stabilisation and fiscal purposes, including the financing of consumer protection measures.
Key constitutional and practical concerns
The most significant issue raised by the draft legislation is its potential incompatibility with the Polish Constitution.
The proposal expressly provides for the taxation of income earned before the Act enters into force, which constitutes a departure from the fundamental principle prohibiting the retroactive application of tax legislation (lex retro non agit).
The explanatory memorandum seeks to justify this approach by arguing that the prohibition of retroactivity is not absolute in tax law and that exceptions may be permissible in extraordinary circumstances. At the same time, however, the drafters themselves acknowledge that the measure must be assessed in light of Article 2 of the Constitution of the Republic of Poland, which embodies the principle of a democratic state governed by the rule of law.
In practical terms, this creates a realistic possibility that the legislation could be challenged as violating the principles of legitimate expectations, legal certainty and the prohibition against retroactive legislation.
Further concerns may arise with respect to the methodology for calculating the tax base, which relies heavily on accounting rules and is intended to incorporate the results generated on hedging derivative financial instruments.
Conclusions
The Polish windfall tax proposal forms part of the broader European trend of imposing additional taxation on extraordinary profits generated within the energy sector.
At the same time, its structure contains several features that significantly increase legal risk, particularly the retroactive taxation of income earned prior to the entry into force of the legislation.
From a practical perspective, should the legislation ultimately be enacted, it is likely to give rise to substantial interpretative disputes and potential constitutional challenges.
