Poland Tax rates
Last partial update, March 2023.Poland's taxation of an individual's income is progressive.
In other words, the higher the income, the higher the rate of tax payable.
The 2023 tax rate for an individual is 12% or 32%.
Individuals can choose, under certain conditions, paying a flat rate of 19% on business income without allowances.
In Poland corporate tax in 2023 is 19%.
Small companies pay 9%.
Poland Individual Income Tax
An individual pays tax on his income as a wage earner or as a self-employed person.The tax for an individual who meets the criteria of a "permanent resident" in Poland will be calculated on his income in Poland and abroad.
A foreign resident who is employed in Poland pays tax only on his income earned in Poland.
An individual is a Polish resident if the center of life is in Poland, or if staying in Poland more than 183 days in a fiscal year.
An employer is obligated to deduct, immediately on a monthly basis, the tax payable on an employee's salary.
A self-employed person must prepay income tax that will be offset on filing an annual return.
The advance payment is determined on the basis of the return made for the previous year.
In the event of a new business, the advance will be calculated on the basis of estimates made by the owner of the business.
Certain payments are deductible from taxable income as detailed below.
Poland Individual income tax rates 2023:
| Tax Base (PLN) | Tax % |
|---|---|
| 1 -120,00 | 12% |
| 120,001 and over | 32% of base exceeding PLN 120,000 |
An additional 4% solidarity tax is imposed on income exceeding PLN 1 million.
Comment: There is an initial allowance of PLN 30,000 on the lowest income bracket.
Poland Capital Gains
- In general, there is no special tax rate for capital gains in Poland.
Capital gains are usually added to the regular income of an individual/company and based on the normal tax rates. - Despite this, if real estate is sold by an individual more than 5 years after it was purchased the capital gain is exempt from tax.
Sale within 5 years from the date of purchase is taxed at 19%. - Individual's capital gain from sale of shares is taxed at a final tax rate of 19%.
- In Poland dividend and interest income for individuals is taxed at 19% rate.
Reporting Dates & Payment Dates in Poland
The tax year in Poland is the calendar year ending on December 31.- An Individual -An individual whose income is from a salary only is not obliged to file an annual return.
The employer who deducts income tax from the employee transfers the tax to the tax authorities each month.
An individual who is self-employed is obliged to make 11 monthly advance payments.
Each advance must be made by the 20th day of any month for the previous month (in December, an advance is paid for both November and December).
The date for filing the annual return is April 30. - A Company -Payment of advances on tax is similar in the case of a limited company to that of the individual.
The company is obliged to file an estimated return to the tax authorities by March 31, and to pay the difference in the tax.
The latest date for filing an annual return is September 30 (for the previous year).
Poland Corporate Tax
- Poland's corporate tax for the year 2023 is 19%, 9% for small companies.
- A company is a Polish resident if registered in Poland, or managing its activities in Poland.
Poland Deduction of Tax at Source
Taxation of Employees - Social Security
Social security payments include disability insurance, sickness and accident insurance.| Employer | Employee |
|---|---|
| 19.21%-22.41% | 13.71% |
Note: The social security payments are subject to a ceiling.
Other Deductions in Poland
Tax is deducted at source from the following payments to nonresidents according to the table below:| % | |
|---|---|
| Dividend | 19 |
| Royalties | 20 |
| Interest | 19/20 |
| Services | 20 |
| Branch Remittance | 0 |
Comment: The deduction at source for a dividend, royalties and interest for foreign residents is subject to the Double Taxation Prevention Treaty.
Dividends received by a resident company from an EU/EEA/Polish company are exempt from deduction at source.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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