CIT bad debt relief in Poland and instalment payments – Supreme Administrative Court of Poland (NSA) ruling
In Poland, instalments cannot extend the 60-day payment limit when a large enterprise owes an SME under Article 7(2a).
The Supreme Administrative Court of Poland (NSA), in case II FSK 1383/24 of 9 April 2026, confirmed that the 60-day limit applies to each instalment.
For Polish CIT bad debt relief, the 90-day period runs from the applicable payment deadline, not from a later contractual date that breaches the statutory limit.
Under Article 18f of the Polish CIT Act, the debtor must make the required adjustment when the statutory conditions are met and the liability remains unpaid.
The NSA ruling does not mean that every B2B payment in Poland is capped at 60 days and does not directly determine the rules for VAT bad debt relief.
Contractual dates may not control the CIT adjustment
A later instalment date cannot postpone the 90-day period if that date breaches the statutory payment limit.
Each instalment requires separate assessment
A shorter valid deadline, such as 30 days, remains applicable rather than being automatically replaced by a 60-day term.
Creditor and debtor treatment is different
Article 18f gives the creditor a right to adjust, while the debtor is required to adjust when the statutory conditions are met.
CIT and VAT require separate analysis
The NSA judgment concerns Article 18f of the CIT Act and should not automatically be applied to Polish VAT settlements.
For CIT bad debt relief in Poland, where a large enterprise pays an amount owed to a micro, small or medium-sized enterprise in instalments, splitting the payment does not allow the statutory 60-day payment period to be extended. The Supreme Administrative Court of Poland (NSA) confirmed this in its judgment of 9 April 2026, case no. II FSK 1383/24.
This has direct implications for corporate income tax (CIT) in Poland. If the payment deadline agreed in a contract exceeds the statutory limit, the date used to determine the tax adjustment must reflect the deadline prescribed by law rather than the later date stated in the instalment schedule.
The ruling concerns CIT and the debtor’s obligations. It does not determine the rules for VAT bad debt relief, nor does it mean that every B2B transaction in Poland is subject to a maximum 60-day payment term.
The judgment is particularly relevant to companies using extended payment schedules for goods or services. From a tax perspective, checking the contractual payment date alone is not sufficient. Companies must also establish whether that deadline complies with Polish rules on counteracting excessive delays in commercial transactions.
In this article:
What exactly did the Polish Supreme Administrative Court decide in case II FSK 1383/24?
The NSA held that splitting a payment into instalments does not allow a large enterprise to circumvent the 60-day limit where the creditor is an SME. The limit under Article 7(2a) of the Act on Counteracting Excessive Delays in Commercial Transactions also applies to each part of a monetary payment.
The case concerned a large enterprise purchasing water and sewage infrastructure from entities in the SME sector. Payment was divided into instalments, with some contractual deadlines falling more than 60 days after delivery of the invoice. The company argued that the 90-day period under the CIT bad debt rules should be calculated separately for each instalment from the payment date specified in the contract or invoice.
The NSA rejected that approach. It agreed with the Director of the National Revenue Information (KIS) and the Voivodeship Administrative Court (WSA) in Warsaw that the mandatory limit under Article 7(2a) must be taken into account when determining the correct payment deadline.
In practice, determining the correct deadline may therefore require a combined review of the contractual provisions and their CIT implications. In such cases, tax advisory services in Poland can help determine which payment deadline should be used for CIT bad debt relief purposes.
Do instalment payments extend the 60-day payment deadline in Poland?
No, not where the debtor is a large enterprise and the creditor is a micro, small or medium-sized enterprise. Dividing an amount into instalments cannot move the payment deadline for individual instalments beyond the statutory maximum under Article 7(2a).
Under this provision, in such a relationship the contractual payment term may not exceed 60 days from the date on which the debtor receives an invoice or bill confirming the supply of goods or performance of services. The Act expressly provides that where the parties agree a payment schedule in instalments, the limit applies to each part of the monetary payment.
At the same time, Article 11 of the Act allows the parties to agree an instalment payment schedule provided that it is not grossly unfair to the creditor. The NSA stressed, however, that the ability to use instalments does not override the specific restriction in Article 7(2a). A company may therefore agree instalment payments, but in a large enterprise–SME relationship the schedule cannot be used to extend the statutory maximum payment term.
When does the 90-day period for Polish CIT bad debt relief start?
As a rule, the 90-day period is calculated from the first day following the expiry of the applicable payment deadline. However, if the deadline stated in the contract or invoice breaches the Act on Counteracting Excessive Delays in Commercial Transactions, Article 18f of the CIT Act requires the statutory deadline to be used instead.
The interaction between these two sets of rules was central to the NSA case. Article 18f(11) of the Polish Corporate Income Tax Act requires the 90-day period to be calculated from the first day after the payment deadline expires. At the same time, Article 18f(15) provides that if the deadline shown on an invoice, bill or in a contract was set in breach of the anti-payment-delay rules, it must be replaced by the deadline resulting from those rules.
The Act on Counteracting Excessive Delays in Commercial Transactions further provides that a 60-day deadline applies instead of a contractual provision that breaches Article 7(2a).
For a transaction covered by Article 7(2a), the process is therefore as follows:
- determine the date from which the payment period begins to run under the Act;
- verify whether the deadline for the relevant instalment exceeds the statutory maximum of 60 days;
- if the contractual deadline breaches that limit, use the deadline resulting from the Act for the purposes of Article 18f of the CIT Act;
- calculate the 90-day period from the first day following the applicable payment deadline.
There is also an exception concerning the date from which the payment period starts. If the date on which the invoice was delivered cannot be established, or if the invoice was delivered before the goods or services were received, the Act provides that the period is calculated from the date on which the debtor receives the goods or services.
How does the 60-day rule work with instalments due after 30, 60, 90 and 120 days?
Assume that a large enterprise purchases a service from a medium-sized enterprise in Poland. The invoice totals PLN 120,000, and the contract divides the payment into four instalments of PLN 30,000, due after 30, 60, 90 and 120 days.
| Instalment | Contractual payment deadline | Assessment in a large enterprise–SME relationship | Reference date for Article 18f CIT |
|---|---|---|---|
| 1 | 30 days | within the limit | contractual deadline |
| 2 | 60 days | within the limit | contractual deadline |
| 3 | 90 days | exceeds the limit | statutory deadline, max. 60 days |
| 4 | 120 days | exceeds the limit | statutory deadline, max. 60 days |
It is important to distinguish between two issues. Each instalment does not automatically receive a new 60-day deadline. If the correctly established deadline for a particular instalment is shorter, for example 30 days, that deadline remains the relevant reference point. The issue arises where contractual instalment dates extend beyond the statutory limit. In that situation, the later date entered in the schedule cannot postpone the start of the 90-day period for the CIT adjustment.
This distinction has practical implications for accounting systems. The due date recorded in a contractual payment schedule may not, by itself, be sufficient to determine the correct timing of the tax adjustment.
How does CIT bad debt relief in Poland affect the creditor and the debtor?
The term bad debt relief can be misleading because Article 18f of the CIT Act provides both a right for the creditor and an obligation for the debtor.
| Party to the transaction | CIT effect once the statutory conditions are met |
|---|---|
| Creditor | may reduce the taxable base or, where a tax loss has been incurred, increase that loss by the amount of an unpaid or unassigned receivable previously recognised as taxable revenue |
| Debtor | must increase the taxable base or, where a tax loss has been incurred, reduce that loss by the amount of an unpaid liability previously recognised as a tax-deductible cost |
| After subsequent payment | the earlier adjustment is reversed accordingly under Article 18f |
The current wording of the CIT Act expressly states that, for the creditor, the taxable base “may be reduced”, whereas for the debtor it “is increased”.
In an individual tax ruling dated 19 May 2026, the Director of the National Revenue Information (KIS) additionally confirmed that the debtor’s obligation applies to the part of the unpaid liability that was recognised as a tax-deductible cost.
The provisions also apply accordingly to partially settled receivables, meaning that the remaining unpaid portion must be analysed. However, Article 18f(1) and (2) does not apply to commercial transactions between related parties within the meaning of the Polish transfer pricing rules.
Is CIT bad debt relief mandatory for the debtor in Poland?
Yes. On the debtor’s side, Article 18f of the CIT Act requires an increase in the taxable base or a corresponding reduction of a tax loss where the statutory conditions are met and the liability remains unpaid. This is not an optional relief equivalent to the right available to the creditor.
Before making the adjustment, however, all conditions under Article 18f must be reviewed. The provision applies to monetary payments arising from commercial transactions. One of the conditions is that the transaction must have been concluded in the course of the creditor’s and debtor’s business activities, with the relevant income subject to income tax in Poland.
The date on which the invoice was issued or the agreement concluded, as well as the debtor’s legal situation, are also relevant. For example, Article 18f(10) addresses restructuring proceedings, bankruptcy and liquidation, and introduces a two-year limit calculated according to the rules set out in that provision. Therefore, establishing that an invoice has remained unpaid for 90 days should not be the only step in the analysis.
Is every B2B payment in Poland subject to a maximum 60-day term?
No. Judgment II FSK 1383/24 concerns a specific relationship: a large enterprise acting as debtor and a micro, small or medium-sized enterprise acting as creditor. It is in this configuration that Article 7(2a) imposes an absolute maximum payment term of 60 days.
For other transactions between businesses, the general rule under Article 7(2) is different. As a rule, the contractual payment term should not exceed 60 days. The parties may, however, expressly agree a longer period provided that the arrangement is not grossly unfair to the creditor.
Separate rules also apply to transactions in which the debtor is a public entity. This limitation on the scope of the ruling is important. The NSA judgment should not be interpreted as meaning that every B2B invoice in Poland must be paid within a maximum of 60 days.
Does the NSA ruling also apply to VAT bad debt relief in Poland?
No. Judgment II FSK 1383/24 concerned corporate income tax and the application of Article 18f of the CIT Act. It does not directly determine the rules governing VAT adjustments.
Bad debt relief also exists under Polish value added tax rules, but it is governed by separate provisions. Conclusions concerning payment deadlines under Article 18f of the CIT Act should therefore not automatically be applied to VAT settlements.
For finance teams, this means that the two analyses must be kept separate: one concerns the CIT consequences and the other the VAT consequences.
What does the NSA ruling mean for large enterprises operating in Poland?
The main practical risk does not arise from the use of instalments itself. The problem arises when a company assumes that later deadlines stated in an instalment schedule are automatically valid for tax settlement purposes as well. Before approving a payment schedule extending over several months, companies should therefore determine the status of both parties to the transaction. If the buyer is a large enterprise and the supplier is an SME, each instalment should be reviewed against Article 7(2a).
In practice, companies should consider not only the wording of the contract but also how payment deadlines are recorded in their accounting systems. The date resulting from the instalment schedule may differ from the deadline that must be applied under Article 18f of the CIT Act.
For agreements involving significant amounts or a large number of instalment payments, it may be appropriate to review payment schedules and the methodology used to determine CIT adjustments as part of tax advisory services in Poland.
Why do instalments not automatically postpone a CIT bad debt adjustment in Poland?
The NSA judgment in case II FSK 1383/24 shows that, when applying CIT bad debt relief, it is not sufficient to read the payment date stated for an instalment in the contract. The first step is to determine whether the payment deadline itself was established in accordance with the rules on counteracting excessive delays in commercial transactions.
Where a large enterprise is the debtor of an SME, the maximum 60-day payment term also applies to payments divided into instalments. A contractual payment schedule cannot override this statutory restriction.
For businesses, this means that contractual analysis must be combined with the CIT treatment. Companies using extended payment schedules should review both the status of their counterparties and the way in which the 90-day period is determined in their accounting systems.
getsix® supports businesses in analysing the tax implications of commercial transactions and applying the rules governing unpaid liabilities correctly. Where questions arise in relation to a specific agreement or payment schedule, support is available through tax advisory services in Poland.
Case law:
This article was written by the getsix® Editorial Teamgetsix® provides accounting, tax advisory, HR and payroll, and business consulting services, supporting companies operating in Poland. The getsix® Editorial Team prepares practical information that makes Polish accounting, tax, and HR and payroll matters easier to understand.
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