CIT bad debt relief in Poland and instalment payments – Supreme Administrative Court of Poland (NSA) ruling

CIT bad debt relief in Poland does not allow a large enterprise to extend the statutory 60-day payment limit by splitting an amount owed to a micro, small or medium-sized enterprise (SME) into instalments. The Supreme Administrative Court of Poland (NSA) confirmed in judgment II FSK 1383/24 of 9 April 2026 that the limit applies to each instalment. If a contractual deadline breaches the statutory rules, the 90-day period under Article 18f runs from the legally applicable deadline.

What did the NSA decide in case II FSK 1383/24?

The case concerned a large enterprise purchasing water and sewage infrastructure from SME-sector entities. Some instalment deadlines fell more than 60 days after delivery of the invoice.

The NSA held that an instalment schedule cannot circumvent Article 7(2a) of the Act on Counteracting Excessive Delays in Commercial Transactions. The 60-day restriction applies to each part of the monetary payment.

When does the 90-day CIT period start?

Article 18f of the Polish Corporate Income Tax Act (CIT Act) calculates the 90-day period from the first day after the applicable payment deadline expires. If a deadline in a contract, invoice or bill breaches the anti-payment-delay rules, the statutory deadline must be used instead.

For a large enterprise–SME transaction:

• determine when the payment period starts;
• check each instalment against the 60-day maximum;
• replace a non-compliant deadline with the statutory deadline;
• count 90 days from the following day.

If the invoice delivery date cannot be established, or the invoice was delivered before the goods or services were received, the period may run from the date the debtor receives the goods or services.

How does the rule work in practice?

For an invoice of PLN 120,000 split into four instalments of PLN 30,000 due after 30, 60, 90 and 120 days, the first two deadlines are within the limit. The third and fourth exceed it, so Article 18f refers to the statutory deadline.

An instalment does not automatically receive a new 60-day term. If its valid deadline is shorter, such as 30 days, that shorter deadline remains relevant.

What does bad debt relief mean for creditor and debtor?

Once the statutory conditions are met, the creditor may reduce the taxable base or increase a tax loss by an unpaid or unassigned receivable previously recognised as taxable revenue. The debtor must increase the taxable base or reduce a tax loss by an unpaid liability previously recognised as a tax-deductible cost.

The rules also apply to partially settled receivables. Article 18f(1) and (2) does not apply to commercial transactions between related parties under Polish transfer pricing rules.

Is every B2B payment in Poland capped at 60 days?

No. The absolute limit under Article 7(2a) concerns a large enterprise as debtor and an SME as creditor. In other business-to-business transactions, a longer deadline may be expressly agreed if it is not grossly unfair to the creditor.

The judgment concerns corporate income tax, not bad debt relief under value added tax (VAT). CIT and VAT therefore require separate analysis.

Read the full article here: CIT bad debt relief in Poland and instalment payments – Supreme Administrative Court of Poland (NSA) ruling.