Tax and Other Legal Changes for Companies from January 1, 2026

1. SALARY AND NON-TAXABLE INCOME AMOUNT (NPD)

From January 1, 2026:

• The minimum monthly wage (gross) will increase to EUR 1,153/month, and the net salary will be approximately EUR 846/month (in 2025 it was EUR 1,038/month gross and EUR 777/month net);
• The minimum hourly wage will increase to EUR 7.05/hour (previously EUR 6.35/hour);
• The maximum monthly non-taxable income amount (NPD) remains unchanged at EUR 747;
• NPD will no longer apply when monthly employment income exceeds EUR 2,677.50.

Due to the increase in the minimum wage and hourly wage, the full amount of foreign business trip allowances will remain non-taxable if the employee’s:

• Monthly salary is at least EUR 1,902.45 (i.e. EUR 1,153 × 1.65), previously EUR 1,712.70;
• Hourly wage is at least EUR 11.63 (i.e. EUR 7.05 × 1.65), previously EUR 10.48.

2. PERSONAL INCOME TAX (PIT)

Taxable personal income, except for the exceptions specified in Article 6 of the Personal Income Tax Law*, will be aggregated and subject to progressive PIT rates:

• 20% – for annual income up to 36 average monthly salaries (VDU)** (EUR 83,237.40 in 2026);
• 25% – for annual income between 36 and 60 VDU (from EUR 83,237.40 to EUR 138,729 in 2026);
• 32% – for annual income exceeding 60 VDU (above EUR 138,729 in 2026).

When calculating salaries, employers will generally apply a 20% PIT rate regardless of the employee’s total annual income, unless the employee requests progressive taxation.

If the annual income thresholds are exceeded and higher PIT rates were not applied during the year, the employee will have to pay the difference when submitting the annual PIT return.

* Except for income specified in Article 6(6) of the PIT Law, which is taxed at a fixed 15% PIT rate, and income taxed with a fixed amount PIT under a business license.

** The projected average monthly salary (VDU) for 2026 is EUR 2,312.15.

The following types of income are included when calculating annual taxable income for the application of 20%, 25%, or 32% PIT rates:

• Employment income;
• Income from individual activities under a certificate;
• Tantiems;
• Royalties and author fees;
• Income of small partnership members and managers;
• Interest income;
• Other income not subject to fixed PIT.

The 15% PIT rate applies to the following income regardless of the amount:

• Dividends;
• Life insurance and pension payouts that benefited from tax relief;
• Sickness, maternity, paternity, childcare, and long-term employment benefits;
• Income from the sale of shares held for more than 5 years and not acquired through an investment account;
• Amounts withdrawn from investment accounts exceeding contributions;
• Income from employee stock options when shares are sold after at least 3 years.

3. HEALTH INSURANCE CONTRIBUTIONS FOR EMPLOYEE BENEFITS

From January 1, 2026, only EUR 350 per year of additional (voluntary) health insurance contributions will qualify for tax relief. Any excess amount will be taxed as employment income.

4. CORPORATE INCOME TAX RATES

From January 1, 2025, corporate income tax rates increased from 15% and 5% to 16% and 6%, therefore the new rates apply when calculating 2025 corporate income tax.

From 2026, the rates increase by an additional 1%:

• The standard corporate income tax rate increases from 16% to 17%;
• The reduced rate for small businesses increases from 6% to 7%.

Newly established small businesses will benefit from an extended period during which a 0% corporate income tax rate may apply.

This tax relief will apply for 2 years from the date of company registration if:

• Annual revenue does not exceed EUR 300,000;
• All shareholders are individuals.

5. OTHER CORPORATE TAX CHANGES

From January 1, 2026, newly acquired fixed assets may qualify for instant depreciation.

This allows businesses to recognize the full acquisition value of an asset as expenses in the same year the asset starts being used, thus reducing taxable profit.

The relief applies to the following asset groups:

• Machinery and equipment;
• Installations and structures (including wells, etc.);
• Computer hardware and communication equipment;
• Software;
• Acquired rights and licenses;
• Trucks, trailers, semi-trailers, and buses not older than 5 years.

Instant depreciation cannot be applied if the acquisition costs are already used to reduce taxable profit under an investment project incentive.

If the asset is used for less than 3 years, previously calculated corporate income tax must be recalculated using standard depreciation or amortization rates.

Recalculation is not required if:

• The company ceases operations;
• The asset is no longer used or transferred due to legal requirements;
• The asset is lost due to force majeure circumstances or criminal acts of third parties;
• The asset is transferred during a reorganization and continues to be used by the acquiring entity until the 3-year period expires.

6. REAL ESTATE TAX CHANGES

Real estate tax rates for legal entities:

• The standard real estate tax rate set by municipalities remains within the range of 0.5%–3%;
• An additional 0.2% real estate tax for businesses will apply together with the municipal rate;
• Abandoned or poorly maintained property will be taxed at rates ranging from 1% to 5%.

Until December 31, 2025, taxable property values were updated every 5 years. From January 1, 2026, they will be updated every 3 years.

7. VAT CHANGES

The reduced VAT rate will increase from 9% to 12% for the following services:

• Accommodation services;
• Passenger and baggage transportation on regular routes;
• Visits to art and cultural institutions and events.

The reduced VAT rate for books and non-periodical publications will decrease from 9% to 5%.

The 9% VAT rate will be abolished and replaced by the standard 21% VAT rate for:

• Heating energy and hot water supplied to residential premises;
• Firewood intended for household heating.

8. LABOR CODE CHANGES

From June 7, 2026, amendments to the Labor Code will come into force. Key expected changes include:

• All employers, regardless of company size, will be required to have an official remuneration system applicable to all employees;
• The system must classify employees into categories or groups based on objective and gender-neutral criteria;
• Employees will have the right to request information regarding their salary and the average salary by gender for employees performing the same or equivalent work;
• Employers must annually inform employees about this right and the procedure for exercising it;
• Employees may not be prohibited from voluntarily disclosing information about their salary.

Companies are recommended to review and update their remuneration systems, confidentiality agreements, recruitment procedures, and related internal processes.