Tax in Poland

If you are planning to work or set up a business in Poland, you will probably have queries regarding taxes. In general, all residents in Poland are required to pay income tax in the country. Expatriates having their personal and economic interest in Poland or who have been living here for more than 183 days during the year are considered to be tax residents.

On the other hand, expatriates who are not residents in Poland will have to pay tax only according to the revenue received in the country.

Types of taxes

There are three types of taxes in Poland:

Direct taxes:

• tax on individual income
• income tax for legal persons

Indirect taxes

• value-added tax
• excise duties
• games tax

Property tax

• inheritance and gift taxes
• tax on acts of civil law
• agricultural tax
• forest tax
• tax on immovable property
• tax on means of transport

Calculating tax

There are various ways to calculate and pay tax in Poland. The progressive tax scale applies, namely, to wages, retirement and economic pensions, etc. Note that households receiving revenue from different sources may produce a common declaration form. Single parents with dependent children, for their part, are eligible for preferential tax rates according to a progressive tax scale and specific conditions as stipulated by Polish tax laws. Note that conditions also apply to common tax declarations.

Couples must:

• have resided in Poland for at least 183 days during a tax year
• be married as per the community property regime
• have been married for the whole tax year when the common declaration has been produced
• have duly filled and signed the PIT form.

Single parents must:

• be single (bachelor or spinster, widow(er) or divorced)
• have a dependent child (either as a parent or as a legal guardian).

Good to know:

Note that children under 18 years of age and adults under 25 years of age who are still studying, provided they have not received any revenue during the current tax year or any other tax-exempt salary, are considered as dependents.

The progressive tax scale

The progressive tax scale on the income of individuals is capped as follow:

• less than 85,528 new zloty per year: 18%, minus the amount reducing the tax by 556.02 new zloty
• more than 85,528 new zloty per year: 14,839.02 new zloty, plus 32% of the excess fixed surplus of 85,528 new zloty.

Income tax on economic activities

Income tax on economic activities is deducted at a rate of 19% per year. Any non- agricultural active individual can choose this type of tax declaration at the tax office. Note that the tax return form must be submitted by the 30th of April of the next year.

Standard income tax

The standard income tax is applied at a fixed rate on certain individual incomes. Taxpayers can choose this payment mode if they comply with existing regulations. They are required to produce their duly filled and signed tax return at the nearest tax office before the 31st January of the following tax year.

Flat tax

The flat tax of 19% applies to certain capital income. These have to be declared separately at the latest on the 31st of January of the following tax year.

Flat-rate income tax

The flat-rate income tax, for its part, applies to gains from games, interests and advances on securities, and interest from one or more bank accounts, regardless of the type of economic activities.

Declaring taxes

First of all, you must have a tax identification number (NIP) to be able to declare your revenue in Poland. You can apply for the NIP by filling the NIP-7 form which is available in all tax centres. Poles, for their part, also require a Universal Electronic System for Registration of the Population (PESEL).

Tax can be settled in two ways: either by your employer (deduction at source at the end of the month) or by oneself.

In the case of tax deduction at source, you must fill a PIT-2 form so as to notify the tax agency. If you prefer to settle your tax payment yourself, you will have to fill the PIT form.

The following forms are also available at the tax office, as indicated by the officer: PIT 36, 36-L, 37, 38 and 39.

Online payment is also possible thanks to the e-Deklaracje (e-Declarations) ' an online system for submitting your tax forms.

Entrepreneurs, for their part, have to settle their tax payment themselves in the form of monthly or quarterly advances. As regards small enterprises and start-ups, they are required to pay tax each trimester.

The tax return has to be submitted on the 30th of April at the latest. Payment can be made either in cash at the tax centre or by a bank transfer.

In the case of common declarations, spouses and single parents with dependent children have to calculate their income separately and deduct, each, their tax reductions. Calculated revenue will then be added together, then divided by two. Tax rates will then be similar for both partners.

Useful links:

Ministry of Finance
Non-double taxation agreements with Poland
PIT ' Directory of Tax Offices in Poland
Finanse ' National Tax Information Center
Migrant ' Taxes in Poland
Universal Electronic System for Registration of the Population