Non-governmental organisations (NGOs), including foundations and associations, play a significant role in Poland’s social and economic landscape.

Although they are not profit-oriented, many NGOs engage in business activities to support their statutory goals. This creates additional accounting, tax and reporting responsibilities that must be properly managed.

Legal framework for NGOs in Poland

NGOs in Poland operate under several key regulations:

• the Foundations Act
• the Law on Associations
• the Accounting Act
• the Public Benefit and Volunteer Work Act
• tax regulations (CIT and VAT)

Understanding how these regulations interact is essential for ensuring compliance and operational efficiency.

Can NGOs run a business?

Yes – NGOs are allowed to conduct business activities, but only under specific conditions.

Business activity must:

• be explicitly included in the organisation’s statutes
• remain a supporting activity, not the main purpose
• generate profits used exclusively for statutory objectives

Typical examples include:

• training services
• publications
• paid events or workshops

This structure allows NGOs to diversify their income while maintaining their non-profit status.

Accounting obligations for NGOs

NGOs that conduct business activities are required to maintain full accounting records.

This includes:

• complete bookkeeping
• proper financial documentation
• preparation of annual financial statements

A key best practice is to clearly separate:

• statutory (non-profit) activities
• business (commercial) activities

This separation improves transparency, simplifies reporting and reduces the risk of compliance issues.

Cost classification in NGOs

Costs in NGOs are typically divided into three categories:

• statutory activity costs
• administrative costs
• business activity costs

In cases where costs overlap (e.g. shared resources), they should be allocated proportionally using a consistent and well-documented method.

This is especially important during audits or grant reporting.

Financial reporting requirements

NGOs are required to prepare annual financial statements, including:

• balance sheet
• profit and loss account
• explanatory notes

Key deadlines:

• preparation – by the end of March
• approval – by the end of June

NGOs conducting business activity must also submit their financial statements to the National Court Register (KRS).

Simplified accounting – who can use it?

Some NGOs may apply simplified accounting rules, but only if:

• they do not conduct business activity, and
• their annual revenue does not exceed the statutory threshold
  (PLN 1,000,000 from 2025)

Once business activity is introduced, full accounting becomes mandatory.

Grants and project accounting

NGOs receiving grants must follow strict financial rules.

Each expense should be:

• justified
• properly documented
• assigned to the correct project

In practice, it is strongly recommended to maintain separate accounting for each project, which simplifies reporting and reduces the risk of funding disputes.

Taxation of NGOs in Poland

NGOs are subject to corporate income tax (CIT), but may benefit from exemptions if income is used for statutory purposes.

Key points:

• CIT-8 filing is mandatory
• VAT applies to commercial activities (with possible exemptions)
• donations and membership fees are generally not subject to VAT

Incorrect classification of income or activities may lead to tax risks, so this area requires particular attention.

What this means in practice

Running business activity within an NGO structure is fully legal – but it significantly increases the level of complexity in accounting and compliance.

The biggest risks usually come from:

• lack of separation between activities
• incorrect cost allocation
• unclear tax treatment

Well-structured accounting is not just a formal requirement – it directly impacts financial control, reporting quality and organisational credibility.

How Easybooks can support NGOs

At Easybooks, we support foundations and associations operating in Poland with:

• full accounting services
• separation of statutory and business activities
• VAT and CIT compliance
• financial reporting and KRS filings
• support in grant and project accounting

If your organisation combines mission-driven work with business activity, it’s worth making sure your accounting model is set up correctly from the start.

Contact Easybooks to ensure your NGO operates compliantly and efficiently in Poland.