Poland: Business Environment
Supplies covered by a reduced rate of 5% include certain unprocessed basic foodstuffs (e.g. bread, meat, fish, fruits and vegetables, dairy products, bakery products, farinaceous products, eggs, fruit and vegetable juices, soups, broths, homogenised and dietetic food), certain agricultural and forestry products, books and certain magazines, electronic publication
Zero-rated activities include exports, intra-Community supplies of goods, supplies of certain sailing vessels, international transport and related services, and supplies of computer equipment to educational institutions.
An extra deduction, ranging from 100% to 200% of qualifying expenses for R&D activities, known as R&D relief, might be accessible. These expenses cover employee costs and other eligible expenditures if the company qualifies as an R&D center. Additionally, a deduction for costs linked to innovative employees, as a complement to R&D relief, is available. Employers unable to directly benefit from R&D relief can deduct the relief's value from income tax advance payments remitted on innovative employees’ salaries. This complementary incentive applies to employees spending at least 50% of their time in R&D activities. Small and start-up taxpayers may avail themselves of a one-time depreciation write-off of up to EUR 50,000 as de minimis aid. A notional interest deduction of up to PLN 250,000 annually is accessible under specific conditions. A reduced 5% tax rate may apply to income from selected intellectual property created, developed, or enhanced through the taxpayer’s R&D activity. Furthermore, various innovation tax reliefs are available, including prototype relief, IPO relief, robotization relief, expansion relief, and CSR relief, each offering additional deductions or incentives for specific activities or investments.
Tax losses are allowed to be carried forward for up to five consecutive tax years, with a limitation that no more than 50% of the loss amount from a specific past year can be utilized in any single subsequent tax year. Tax losses cannot be carried back to offset previous years' profits or taxes.
Real property tax rates are fixed by municipalities within limits set in the Law on Local Taxes and Fees. In 2024, land used for business purposes is subject to a rate of PLN 1.34 per square metre. Buildings used for business purposes are subject to a rate of PLN 33.10 per square metre (depending on local authorities). Stamp duties and a transfer tax (0.5-2% on transactions such as sales and loans that are not covered by VAT) also apply.
As far as the social security system is concerned, employer contributions range from 19.48% to 22.14% of the employee's gross salary; the contribution rate for the employee is 13.71% of the gross salary. The rates apply to salaries below PLN 234,720 (2024). Above this limit, the salary is subject to a contribution rate of 3.22% to 5.88% payable by the employer (2.45% payable by the employee). Contributions to a new type of retirement savings plan financed jointly by the employee, the employer and the government (Employee Capital Plans - PPK), are equal to 1.5% for the employer and 2% for the employee. Persons are enrolled by default but have the option to opt-out.
An additional tax is levied on the activities of certain financial institutions including local banks, branches of foreign banks, and insurance and reinsurance companies. The tax applies at a rate of 0.0366% per month when the value of assets exceeds PLN 200 million in the case of credit institutions, PLN 2 billion in the case of insurance and reinsurance companies and PLN 4 billion in the case of other financial institutions.
Shipping companies may opt to pay tonnage tax on certain types of income. A special tax is imposed on the excavation of silver, copper, crude oil, and natural gas
An income tax from retail sales applies to retailers whose monthly turnover exceeds PLN 17 million at 0.8% on revenues up to PLN 170 million and 1.4% on revenues in excess of this amount.
Poland | Eastern Europe & Central Asia | United States | Germany | |
Number of Payments of Taxes per Year | 7.0 | 13.9 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 334.0 | 226.2 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 40.8 | 36.5 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Income tax | Progressive rate from 12% to 32% |
Tax base below PLN 120,000 | 12% minus amount-decreasing tax (the tax-free amount is income up to PLN 30,000) |
Tax base above PLN 120,000 | PLN 10,800 + 32% amount exceeding PLN 120,000 |
Solidarity surtax (for individuals with annual income from specific sources over PLN 1 million) | 4% on the income exceeding PLN 1 million |
Individuals running business activities (as sole traders or as partners in partnerships) | Discretionary flat 19% income tax rate (subject to certain conditions) |
Individuals under 26 with income from employment or personal service contracts | exemption on income up to PLN 85,528 |
A standard deduction applies to employees, generally at PLN 250 per month. The annual limit of tax costs from one's employment currently cannot exceed PLN 3,000.
An independent worker may claim various allowances, depending on the type of activities performed (the standard deduction usually amounts to 20% of the revenue, but can go up to 50% or PLN 120,000 for creative activities).
As of January 1, 2022, taxpayers earning income taxed according to the tax scale are entitled to a personal allowance of PLN 30,000. From the same date, a tax relief was introduced for single parents, for a deduction of PLN 1,500 per year from the personal income tax due.
The annual income tax can be further reduced by:
- PLN 1,112 per child in a family consisting of one child, provided that the taxpayers’ joint annual taxable income is not higher than PLN 112,000 (for married taxpayers) or PLN 56,000 (for single taxpayers)
- PLN 1,112 per child in a family consisting of two children (irrespective of taxpayer’s income), or
- PLN 1,112 per first and second child, PLN 2,000 per third child, and PLN 2,700 per fourth and each subsequent child in a family consisting of three or more children (irrespective of taxpayer’s income).
Individuals running business activities as sole traders or partners in partnerships can deduct all expenses incurred in order to derive revenue or to "protect a source of income", unless differently specified.
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Latest Update: July 2024