Accounting, payroll and tax compliance for foreign defense and defence-industry companies operating in Poland — subsidiaries, branches and joint ventures.
Poland’s defense modernisation has brought manufacturers and suppliers from the United States, South Korea and across Europe to set up operations here. The concession, the export licence and the supply contract are usually handled early. The accounting that has to carry a multi-year contract, a team of engineers on site and a group reporting calendar is often set up last. We take that part on from the first month.
Defense and security companies with a Polish entity
Our clients are foreign-owned. Their decisions are taken abroad, their reporting goes to a parent company, and their Polish entity has to meet local rules without becoming a second headquarters.
- Prime contractors and their subsidiaries — manufacturers delivering equipment to the Polish armed forces through a local subsidiary or branch, often with installation, training and maintenance performed in Poland.
- Joint ventures with Polish partners — production and technology partnerships with Polish industry, where two owners, two reporting standards and one set of Polish books have to agree.
- Suppliers in the defense supply chain — component, electronics and dual-use producers, aerospace suppliers and defense IT providers that open a plant, a service centre or a sales office in Poland.
What makes accounting for defense companies different
The ledger is the same as in any other industry. What changes is the contract behind it, the people performing it and the questions an auditor or a tax authority will ask later.
- Contracts run for years, not months — framework agreements with milestone payments, advance payments and acceptance procedures do not match a monthly invoicing rhythm. Revenue, costs to complete and possible contract losses have to be recognised by a method that satisfies both the Polish Accounting Act and your group standard.
- Every cost belongs to a programme — government contracts, cost-based pricing and audits by the contracting authority all require costs to be traceable to a specific contract. A chart of accounts built for a sales office does not provide that, and rebuilding it after the first audit is expensive.
- People on site create obligations — engineers, trainers and service teams sent to Poland for longer periods can create a permanent establishment for the foreign company, Polish income tax for the employees and social security questions for both. The timeline decides, and it tends to extend.
- Two calendars, one set of figures — the parent expects a reporting package in IFRS or US GAAP within days of month-end. Polish statutory accounts, tax returns and e-invoicing through KSeF follow their own deadlines. Both have to come from the same books and reconcile without manual adjustments at year-end.
Accounting, payroll and tax services for defense companies in Poland
Four areas, provided together or separately. Each is set up for the reporting your group already uses.
01 — Market entry: setting up the Polish entity for defense work
Whether you register a subsidiary, a branch or a joint venture company, the accounting structure is decided in the first weeks — and it is difficult to change once the first contract is booked.
What we do:
- assess which structure fits the contract: subsidiary, branch or joint venture company,
- register the entity for VAT, CIT, payroll and KSeF e-invoicing,
- build a chart of accounts mapped to your group’s reporting lines and cost centres,
- set up project and contract dimensions before the first cost is booked,
- agree the accounting policy for long-term contracts with your group controllers and auditors.
What you receive:
- an entity that can invoice, pay and employ from day one,
- a written accounting policy in English, approved by the management board,
- a mapping between Polish accounts and your group reporting package,
- a calendar of Polish filing deadlines alongside your group closing timetable.
02 — Accounting and reporting: bookkeeping, project accounting and group reporting
Monthly accounting that follows the contract, not only the invoice — and a reporting package your parent company can consolidate without rework.
What we do:
- keep the books under the Polish Accounting Act, with a monthly close to your group deadline,
- account for long-term contracts by stage of completion, including costs to complete and loss provisions,
- track costs, advances and milestone payments by contract and programme,
- prepare reporting packages in IFRS or US GAAP, reconciled to the Polish books,
- prepare statutory financial statements and support the statutory and group audit.
What you receive:
- monthly management reporting in English, by contract where you need it,
- one set of figures for Polish filings and group consolidation,
- audit files prepared before the auditor asks for them,
- a named accountant who knows your contracts, not a rotating team.
Illustrative example: a joint venture recognising revenue on invoicing
A European manufacturer and a Polish industrial partner produce components through a joint venture under a five-year framework contract with milestone payments. The Polish books recognise revenue when invoices are issued. The European owner reports under IFRS 15 and recognises revenue over time. At the first group audit the two sets of figures differ by several months of revenue, and the partners disagree about the dividend.
What a review changes: the joint venture adopts one documented method for long-term contracts that meets both the Polish Accounting Act and IFRS 15, costs to complete are re-estimated every quarter, and a monthly reconciliation shows both owners the same result before it reaches the auditor.
03 — Payroll and mobility: payroll for local teams and staff sent to Poland
Defense projects in Poland typically combine a local workforce with engineers and specialists sent from the parent company. Each group is taxed and insured differently.
What we do:
- run monthly payroll, PIT and ZUS social security filings for your Polish employees,
- assess the tax and social security position of staff sent to Poland, including A1 certificates and bilateral agreements with the United States and South Korea,
- track days spent in Poland against tax residence and treaty thresholds,
- handle shadow payroll for employees paid abroad but taxable in Poland,
- limit access to payroll data to named persons agreed with your security officer.
What you receive:
- accurate payslips and filings, in English and Polish,
- an overview of which assignees become taxable in Poland, and when,
- payroll cost reports by contract for your project accounting.
Illustrative example: an installation team that stays longer than planned
A US supplier sends 14 engineers to Poland to install a system and train military personnel. The assignment is planned for six months and paid from the United States. Acceptance tests are postponed twice, and the team is still on site after eleven months.
What a review changes: the timeline is checked early against the permanent establishment threshold in the tax treaty, the engineers who have become taxable in Poland are placed on a shadow payroll, certificates of coverage are obtained for social security, and the decision whether to perform the rest of the contract through a Polish entity is taken with the costs known in advance.
04 — Tax and VAT: tax compliance and advisory for defense contracts
Tax questions in defense work arise less from the tax rates than from the structure of the contract: who supplies, to whom, from where, and who performs the work.
- VAT on defense supplies — supplies to the armed forces of other NATO states and supplies within the EU defence effort can fall under specific VAT rules. The treatment depends on the recipient and the documentation it provides.
- Imports and customs — imports of certain military equipment can benefit from a suspension of customs duties. Import VAT, customs documentation and the accounting of goods in transit have to follow the same timeline.
- Permanent establishment — installation, training and maintenance performed in Poland by a foreign company can create a permanent establishment. We assess the risk before the project starts, not after the tax audit.
- Intercompany charges — licence fees, technical services and management fees charged by the parent drive withholding tax and transfer pricing documentation. The charge has to be deductible and defensible.
- Investment incentives — manufacturing investments may qualify for a CIT exemption under the Polish Investment Zone, and development work for the R&D relief or IP Box. Each requires separate records from the start.
- Monthly compliance — VAT returns and JPK_V7 files, CIT advance payments, KSeF e-invoicing and the VAT white list, filed on time and reconciled to the books.
Illustrative example: a new plant with a Polish Investment Zone decision
A Scandinavian producer of dual-use electronics opens a plant in Poland and obtains a Polish Investment Zone decision. The plant also sells spare parts and services that are not covered by the decision. The first year’s books record all income together.
What a review changes: income and costs covered by the decision are separated from the rest of the business, eligible investment costs and headcount commitments are tracked against the terms of the decision, and the exemption is calculated on records that will hold up in a tax audit.
How we work with confidential defense programmes
Bookkeeping, payroll and tax compliance rely on financial data. They do not require classified technical content, export-controlled technical data or programme specifications.
- Only the data accounting needs — we agree with your security officer which documents reach us and in what form, typically invoices, the financial terms of contracts and payroll data. Where a contract itself is classified, we work from extracts prepared by your team.
- Defined access — access to your books and payroll is limited to a named team. Documents are exchanged through the channel you specify, and the rules are written into our engagement terms.
What we do not cover
Defense concessions, export and transfer licences, end-user documentation and industrial security clearances are regulatory matters handled by your legal counsel. We coordinate with them on the accounting side — for example on changes in company data, shareholders or management that also have to be reported to the authorities.
Key facts: accounting and tax for defense companies in Poland
The framework your Polish entity works within. The same rules apply across industries; the defense context changes how often they come into play.
| Area | Key information |
|---|---|
| Accounting framework | Polish Accounting Act. A subsidiary of a group that reports under IFRS may, subject to a shareholder resolution, prepare its statutory accounts under IFRS. |
| Statutory financial statements | Prepared within three months of the year-end, approved within six months and filed with the National Court Register (KRS). A statutory audit is required once the company exceeds the size thresholds. |
| Long-term contracts | Revenue can be recognised by stage of completion where the conditions of the Accounting Act are met; group reporting typically applies IFRS 15 or ASC 606 over time. |
| Corporate income tax | Standard rate 19%, reduced rate 9% for small taxpayers. Polish Investment Zone decisions can exempt income from a qualifying investment. |
| VAT | Standard rate 23%. Specific rules can apply to supplies to the armed forces of other NATO states and within the EU defence effort. |
| E-invoicing | Invoices are issued through the national e-invoicing system KSeF, mandatory since 2026. |
| Payroll | Monthly PIT and ZUS social security filings. Staff sent to Poland are covered by A1 certificates within the EU or by bilateral social security agreements, including with the United States and South Korea. |
| Transfer pricing | Intercompany transactions above the statutory thresholds require local documentation and an annual TP-R filing. |
This overview is general information, not tax or accounting advice on an individual matter. Rates, thresholds and deadlines change; we confirm the current position for your entity.
An accounting partner built for foreign-owned companies
- Foreign owners are our standard client — we work almost exclusively with companies whose owners sit outside Poland. Reporting, correspondence and meetings are in English, German or Polish, in the format your headquarters expects.
- Accounting, payroll, tax and legal under one roof — the accountant who books your contract works alongside the payroll team, the tax advisers and our Tax & Legal team. A question about an assignee, an intercompany charge or a contract clause gets one answer, not four.
- Part of the HLB network — getsix® is a member of HLB International. Where your group’s auditors or advisers sit in another country, we coordinate with them directly rather than leaving you to translate between them.
- Continuity over the life of the contract — defense contracts outlast reporting cycles and, often, the people who negotiated them. A named accountant and documented policies keep your Polish books consistent for the whole programme.
Frequently asked questions about accounting for defense companies in Poland
Does a defense company in Poland need a specialised accounting provider?
Polish accounting rules are the same for every industry. What a defense company needs is a provider that can account for long-term contracts, keep costs traceable by programme, handle staff sent from abroad and report to a foreign parent in its own standard. These requirements appear from the first contract, which is why the accounting structure should be agreed before it is signed.
Can you keep our books under Polish rules and report in IFRS or US GAAP?
Yes. We keep the statutory books under the Polish Accounting Act and prepare the group reporting package in IFRS or US GAAP, reconciled to the Polish figures each month. A subsidiary of an IFRS-reporting group may also adopt IFRS for its statutory accounts, which removes one layer of reconciliation.
How are long-term defense contracts accounted for in Poland?
Where the conditions of the Accounting Act are met, revenue from long-term contracts can be recognised by stage of completion rather than on invoicing. Costs to complete are estimated regularly, and an expected loss on a contract is provided for when it becomes apparent. We agree the method with your group controllers and auditors at the start, so that Polish and group figures follow the same logic.
Does sending engineers to Poland create tax obligations?
It can, in two ways. The foreign company may create a permanent establishment in Poland, particularly with installation or service projects that run beyond the period set in the relevant tax treaty. The employees may become taxable in Poland once they exceed the treaty conditions for employment income. We assess both before the assignment starts and monitor them while it runs.
Do you need access to classified information to keep our books?
No. Accounting, payroll and tax compliance work with financial data — invoices, the financial terms of contracts and payroll information. Where a contract is classified, we agree with your security officer which extracts reach us, and we work from those.
Do you obtain defense concessions or export licences?
No. Concessions for military and police-use products, export and transfer licences for strategic goods and industrial security clearances are regulatory matters for your legal counsel. We work alongside them on the accounting and reporting side of those processes.
Can we start with payroll only and add accounting later?
Yes. Many clients begin with payroll for an initial project team and move the bookkeeping to us once the Polish entity starts invoicing. We set up payroll so that its data fits the chart of accounts you will use later.
Discuss your Polish entity with our accounting team
Tell us about the contract, the structure you are considering and the reporting your group expects. You receive an outline of how we would set up the accounting, payroll and tax compliance, and a fixed quotation before the work starts.
getsix® Accounting team
Dedicated client manager for
foreign-owned companies
Accounting, payroll and tax compliance for subsidiaries, branches and joint ventures in Poland. Working languages: English, German, Polish.
Related services
- Accounting services in Poland — bookkeeping, statutory reporting and group reporting for foreign-owned companies.
- HR and payroll services — payroll, employment documentation and social security for local and assigned staff.
- VAT in Poland and Europe — chain transactions, fixed establishment and VAT disputes.
- Withholding tax in Poland — licence fees, technical services and treaty relief on payments to the parent company.
- Permanent establishment in Poland — when project work in Poland creates a taxable presence for a foreign company.
- Company law and corporate services — company formation, joint ventures and corporate changes for foreign investors.
