A dividend from a sp. z o.o. (limited liability company) is paid from the profit shown in the approved financial statements, on the basis of a resolution of the shareholders' meeting. On the payout the company, as remitter, withholds 19% flat-rate income tax, which is not combined with the shareholder's other income. Below we describe the procedure from year-end close to transfer, together with tax obligations and a worked example.
Where the amount available for payout comes from
The Code of Commercial Companies permits distribution among shareholders only of money the company has actually earned. The upper limit (Article 192 CCC) is the profit for the last financial year, increased by undistributed profits from previous years and by funds from the supplementary and reserve capitals created from profit that may be used for distribution. From this amount the following are deducted:
- uncovered losses,
- the value of own shares,
- amounts which the Act or the articles of association require to be transferred from profit to supplementary or reserve capital.
The starting point is therefore the net result, i.e. profit after CIT, not the balance of the bank account. The company may have plenty of cash and at the same time have nothing from which to pay a dividend, for example when it is covering losses from previous years. How the CIT taxable income is determined is explained in the article What is CIT.
Procedure step by step
- Financial statements. The management board draws them up within 3 months of the balance-sheet date, i.e. by 31 March for a calendar year.
- Ordinary shareholders' meeting. It must be held within 6 months after the end of the financial year. It approves the statements and adopts a resolution on the distribution of profit or the covering of a loss.
- Content of the resolution. It is worth stating in it the amount earmarked for dividend, the method of distribution between shareholders, the dividend day and the payment date. Unless the articles of association provide otherwise, profit is distributed in proportion to shares.
- Dividend day. If the articles of association allow it, the meeting may set a date by reference to which the list of entitled persons is drawn up — no later than two months after the resolution. Without such an indication, the date is the date on which the resolution is adopted.
- Payout. It takes place on the day set in the resolution and, in its absence, immediately after the dividend day.
- Documents in KRS. Within 15 days of approval, the management board files the financial statements with the repository, together with the resolution on approval and on the distribution of profit.
A shareholder who received a payout contrary to the regulations or the articles of association must return it. Members of the management board responsible for such a payout are liable jointly and severally with them for the return.
Advance on account of dividend
You do not have to wait for the statements to be approved if the articles of association authorise the management board to pay advances during the year. The conditions are strict, however:
- the approved financial statements for the previous year must show a profit;
- the advance may amount to no more than half of the profit achieved since the end of the previous financial year (increased by reserve capitals created from profit which the management board may use for this purpose, and reduced by uncovered losses and own shares);
- the company must have sufficient funds for the payout.
If the year ends in a loss, the shareholders return the advances in full, and if the profit is lower than the advances paid — in the part exceeding that profit. In practice, advances require reliable interim results from accounting; otherwise a return easily becomes necessary.
Tax on the dividend and the remitter's obligations
A dividend paid to a shareholder who is a natural person is subject to the 19% flat-rate tax under Article 30a(1)(4) of the PIT Act. It is not added to employment or business income, so it does not affect the tax-scale threshold, and the shareholder does not report it in the annual return.
The obligations rest with the company:
- it withholds the tax on the day the dividend is paid or made available to the shareholder;
- it pays it into the tax office's account no later than the 20th day of the following month;
- by the end of January of the next year it files the remitter's annual return (PIT-8AR).
The resolution with the payment date set and the actual transfer may fall in different months. The moment of withholding is worth agreeing with the accountant before the company transfers the money, because a delay in forwarding the tax burdens the remitter with interest.
A shareholder living abroad is covered by the double taxation treaty with the state of their residence. The reduced treaty rate may be applied after obtaining a certificate of tax residence from them. For a company on Estonian CIT, the tax on a dividend paid from profits of the lump-sum period is reduced by 90% or 70% of the shareholder's share of the lump sum paid by the company.
Example: how much reaches the shareholder
A single-shareholder sp. z o.o. is a small CIT taxpayer and in 2026 achieves taxable income of PLN 200,000 (equal, for simplicity, to the accounting result). The entire net profit is earmarked for dividend.
| Item | CIT 9% | CIT 19% |
|---|---|---|
| Company income | PLN 200,000 | PLN 200,000 |
| CIT paid by the company | PLN 18,000 | PLN 38,000 |
| Gross dividend | PLN 182,000 | PLN 162,000 |
| 19% PIT withheld by the company | PLN 34,580 | PLN 30,780 |
| Amount in the shareholder's account | PLN 147,420 | PLN 131,220 |
| Total burden | around 26.3% | around 34.4% |
This double layer of taxation means that a dividend is rarely the only way of taking money out of the company. It is often combined with remuneration of a management-board member or an employment contract; a comparison of these routes is given in the article What taxes a sp. z o.o. pays.
Most common mistakes
- Paying out a "dividend" from current inflows without approved statements and a resolution — in practice this triggers an obligation to return and a dispute over the tax classification.
- Paying an advance without authorisation in the articles of association.
- Omitting uncovered losses from previous years when calculating the amount available for distribution.
- Failing to withhold the 19% tax on a transfer to a sole shareholder who "is the owner anyway".
- Late filing of the statements and the resolution in KRS.
How Good Balance can help
We prepare resolutions on profit distribution and advances, calculate the amount available for payout and settle the tax as remitter. If you are considering the most favourable combination of dividend and remuneration, we invite you to a consultation. We keep the company's books and financial statements as part of full accounting.