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Paying taxes in Poland

Updated on Tuesday 01st September 2015

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The legal basis for paying taxes in Poland

The legal basis for the tax liability in Poland is effective from 17 October 1997 and it is established by the Polish Constitution in the Article 217 which provides that imposition of taxes and other public charges and determination of taxable entities subject to tax payment in Poland, tax rates, categories of taxpayers exempted from paying taxes a in Poland and the rules for granting tax reliefs and remissions can occur only by the laws and regulations established by the state.

The Polish tax system consists of twelve tax titles, which are defined as public, unpaid, compulsory and non-returnable funds to the state treasury, state, county or municipality. The provisions of the Tax Code also apply to fees and other non-tax duties for the state budget and the budgets of local governments, which are authorized by the tax authorities and regulated by rulings on local taxes and fees.

 

Income tax in Poland

When paying taxes in Poland, there must be taken in account the income tax, which is mandatory for both natural or legal person and is calculated depending on the income and deductions used.

The law in Poland distinguishes the concept of income tax for personal income and corporate income.

In this sense, the income tax from natural persons ( PIT) is a direct tax on the income earned by individuals. As a general rule, the PIT is paid by the progressive tax scale, using tax rates of 18% and 32%. Another form of personal income taxation can be (under certain conditions) 19% tax on income from non-agricultural activities or special branches of agricultural production, certain types of capital flows (for example from the sale of securities or derivative financial instruments), the sale of the property and rights.

When paying taxes in Poland there must be known that taxation of income tax revenue for companies is governed by the law of 15 February 1992 on income tax for legal persons. The corporate income tax rate in Poland is 19% and it applies to limited liability companies, organizations, organizational units without legal personality (exception companies without legal personality), in certain conditions for companies without legal personality having its registered office or headquarters in another Member State, tax capital groups.

 

Tax on profits

The revenues from the sale of securities or derivative financial instruments and the realization of the rights arising from them, and from the sale of shares in companies having legal personality, obtained on Polish territory, are subject to tax on profits, with a tax rate of 19%, as laid down in Art. 30b. of the Law on Personal Income Tax.

 

Compulsory contributions to social insurance

Social insurance in Poland include pension, disability, sickness and maternity funds. Health insurance is mandatory in case of illness, accident, injury, poisoning, life threatening conditions. In order to benefit from this insurance, both employer and employee must pay contributions arising from the insurance contract, regulated by the National Health Fund (NFZ). The amount of social security that must be paid is 19,52% for pension, 13% for annuities, 2,45% for sickness, 0.90% to 3.60% for accidents. These amounts are calculated in accordance with the employee's wage and income.

 

Real estate tax

When paying taxes in Poland, the real estate tax must be taken in account. The real estate tax in Poland is a local tax, levied by local governments and it is applied for owners of land, buildings or parts of buildings, buildings or parts associated with running a business.

Real estate tax payers are individuals or legal persons, organizational units, including companies without legal personality, which are owners of real estate or buildings, holders of the intrinsic property or buildings, users of perpetual land and other particular categories provided by the law.

 

VAT tax

The Value Added Tax (VAT) is an indirect tax, levied at each step of the selling of goods or services. In Poland there are three types of VAT rates: the basic rate of 23%, the reduced rate of 6% applied to the supply of selected food products, medical devices, food service and hospitality and social housing and a VAT rate of 5% applied to the supply of certain foods (such as bread, dairy products, meat) and selected types of books.

 

Find out more about paying taxes in Poland by contacting our Polish company formation specialists who are up to date with all the legal provisions in this field.

 

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