PERSONAL INCOME TAX (refers to individuals)

Personal income taxes in Poland

 

Individuals are taxed on their income. Fiscal residents are taxed on their worldwide income. Non residents are taxed only on their income derived from the territory of Poland. The rules of taxation of foreign income vary depending on country of source of the income (details are provided in the double taxation treaties)

The income tax is progressive. In 2017 the following rates are in effect:

Base of tax calculation PLN Tax payable
up to 85 528 18% minus the amount decreasing the tax
over 85 528 15 395,04 + 32% over 85 528 zł minus the amount decreasing the tax

The amount decreasing the tax depends on the base of tax, the maximum value is 1.440 PLN.

Certain categories of income are taxed with fixed rates, e.g.:

  • 19% on dividends,
  • 19% on interest on bank investments,
  • 19% on sale of real estate used for housing purposes,
  • 75% on revenue from undisclosed sources or not matching up with disclosed sources,
  • 10% on winnings in competitions, games and mutual bets, or prizes related to bonus sales.

The 19% linear income tax for individuals carrying out their business activity was brought into effect on January 1, 2004. Economic activity is understood as profit-gaining activity, carried on one's own behalf, irrespective of the results thereof, in an organized and uninterrupted manner, the revenues earned from which are not included in other revenue sources.

Choosing a linear income taxation results in automatic resignation from all deductions and allowances. The entrepreneurs are only entitled to reduce the income by the contribution for social security, and to reduce the tax rate by a contribution to the health fund.

Choosing a linear income taxation also results in resignation from the right of a joint taxation with the spouse or preferences provided for single parents.

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