Tax in Poland for foreigners Basic Information for Work & Income

Tax in Poland for foreigners. Living in Poland, you pay taxes all the time — whether you’re shopping, fueling your car, or paying bills, taxes like VAT (Value Added Tax) are already included in the price. So, it’s impossible to avoid paying taxes completely.

However, there are certain situations where a person may be exempt from paying income tax (PIT) — for example, young people under 26, or non-residents who are covered by a double taxation agreement.

Understanding the Polish tax law and the various PIT forms is crucial for proper tax compliance. The Ministry of Finance oversees the taxation system, ensuring its smooth operation.

When a foreigner doesn’t have to pay income tax (PIT) in Poland:

They are under 26 years old

• And work under an employment contract or a mandate contract (umowa zlecenie),
• And their annual income does not exceed PLN 85,528. –

They are not a Polish tax resident

• And they are working in Poland short-term,
• And their home country has a tax treaty with Poland (Double Taxation Agreement).

 In such cases, they may only pay tax in their home country.

They are a diplomat, scientist, or part of an international mission

Certain professions may be fully or partially exempt from taxes, depending on international agreements or Polish law.

Their annual income does not exceed the tax-free amount

• In Poland, the tax-free threshold is PLN 30,000 per year.
• Anyone (including foreigners who are Polish tax residents) earning less than this amount doesn’t pay PIT.

When they must pay taxes:

• They stay in Poland for more than 183 days per year – they become a tax resident,
• They have their center of life or economic interest in Poland,
• They earn income from work, business, rent, etc. in Poland.

Overview of Taxation in Poland Short about tax in Poland for foreigners

Understanding the Tax System in Poland

The Polish tax system operates on the principle that individuals and businesses pay taxes based on their income earned within Poland. Income tax, primarily through the Personal Income Tax (PIT), is a significant component. The Polish tax system is designed to collect revenue from various sources, including employment, business activity, and other income sources. The authority responsible for taxation is the Tax Office. Understanding the basic structure is the first step towards compliance.

Types of Taxes in Poland

Poland levies several types of taxes. For individuals, the most relevant is income tax, covering income from work, contracts, and business activity. PIT-37 and PIT-11 are common PIT forms. Businesses may also be subject to VAT and corporate income tax. The specific type of tax depends on the source of income and the nature of the economic activity. Understanding these different types is crucial for proper tax declaration and payment.

Importance of Tax Compliance

Tax compliance is vital in Poland. Failing to meet tax obligations can result in penalties and legal consequences. Submitting an annual tax declaration accurately and on time is crucial. Compliance ensures that the country can fund public services and infrastructure. Every person working in Poland has a responsibility to understand and adhere to the Polish tax law. The Tax Office provides resources to help taxpayers comply.

Personal Income Tax (PIT) in Poland

What is Personal Income Tax?

Personal Income Tax, or PIT, in Poland is a tax levied on the income of individuals. This includes income earned from employment, business activity, contracts, and other sources. Every person working in Poland is subject to income tax based on their income earned during the tax year. The Polish tax law requires individuals to submit an annual tax declaration, typically using PIT forms like PIT-37 or PIT-11. The Ministry of Finance oversees the PIT system.

PIT Rates and Brackets

The income tax rate in Poland is progressive, meaning it increases as income increases. There are different tax brackets, and the tax rate applied depends on the income level. The specific rates and income thresholds for each tax bracket are subject to change, so it is essential to stay updated with the current Polish tax law. Understanding these rates is basic for proper income tax calculation and payment.

Tax Deductions and Allowances

Poland’s tax system offers various tax deductions and allowances that can reduce the amount of income tax that individuals pay. These deductions can include expenses related to work, education, healthcare, and charitable contributions. Understanding and utilizing these deductions can significantly lower the tax liability of every person working in Poland. Individuals should consult the Polish tax law or seek professional tax advice to determine which deductions they are eligible for.

Income Tax Forms and Filing Procedures

Common Income Tax Forms

Several PIT forms are used in Poland, with PIT-37 and PIT-11 being the most common. PIT-11 is an information form provided by the employer, detailing the income earned and taxes withheld during the tax year. PIT-37 is used by individuals to submit an annual tax declaration based on the information provided by their employer and other sources of income. Selecting the correct type of PIT form is important for tax compliance.

How to Send Your Tax Return

Individuals can send their tax return in Poland online through the Tax Office website. This requires access to the internet and an active account. Alternatively, tax returns can be submitted in person at the Tax Office or sent by mail. The Ministry of Finance encourages online submission for efficiency. It’s basic to provide all required information accurately when sending your tax declaration.

Deadlines for Filing tax settlement in Poland

The deadline for submitting an annual tax declaration in Poland is typically April 30 following the end of the tax year. The employer provides PIT-11 information by the end of February. It is crucial to submit the tax return by the deadline to avoid penalties. Taxpayers should plan to submit an annual tax declaration on time to adhere to Polish tax law. The Tax Office may extend the deadline in specific cases.

Where to seek assistance for tax matters?

Understanding the details of settlement can be difficult. If unsure, contact a competent tax advisor or use professional services. These services help settle income and prepare documents correctly.Use official sources and verified companies. Services like TimeTax support foreigners who must pay tax in Poland. They ensure you understand each settlement method available to you.

Support services help with advance income tax, documentation, and refunds. You’ll avoid stress and improve compliance. Getting help means better outcomes and more confidence when you submit your tax. TimeTax offers comprehensive tax settlement services for foreigners working in Poland, ensuring accurate filings and maximizing potential refunds. Their expertise simplifies the tax process, providing peace of mind and financial benefits.

Tax Offices and Assistance

Finding Your Local Tax Office

Finding your local Tax Office in Poland is essential for addressing any tax-related queries or concerns. The Ministry of Finance provides resources, often online, to locate the nearest office based on your residence or business address. Every person working in Poland may need to visit the Tax Office for various reasons, such as submitting documents or seeking clarification on the Polish tax law. Ensuring you have the correct address is basic before planning a visit. The Tax Office website is a good place to start your search.

Resources for Tax Information

There are many resources available in Poland for obtaining tax information. The Tax Office website offers guidance on various tax matters, including income tax, PIT forms, and tax declarations. Additionally, the Ministry of Finance publishes updates on the Polish tax law and regulations. Taxpayers can also consult tax advisors or accountants for personalized assistance. Ensuring you have access to reliable information is basic for tax compliance. Understanding the intricacies of the tax system is crucial for every person working in Poland.

Changes in Tax Law and Regulations – Tax in Poland For Foreigners

Recent Changes in Tax Legislation

The Polish tax law and regulations are subject to change, so it’s important to stay updated on recent amendments. The Ministry of Finance periodically introduces changes to income tax rates, tax deductions, and filing procedures. These changes can impact the amount of income tax that every person working in Poland pays. Staying informed about recent legislative changes is essential for accurate tax declaration and compliance. The Tax Office website is an invaluable resource for the latest information.

Impact of Law Changes on Taxpayers

Changes in the Polish tax law can significantly impact taxpayers, affecting their tax liabilities and compliance requirements. Modifications to income tax rates or tax deductions can influence the amount of income tax individuals pay. It’s basic for taxpayers to understand how these changes affect their specific circumstances, whether they’re dealing with income from work, business activity, or other sources. Consulting the Tax Office or a tax advisor can help every person working in Poland navigate these changes effectively and submit an annual tax declaration.

Future Trends in Taxation in Poland

The future of taxation in Poland is likely to see a continued emphasis on digitalization and simplification of tax processes. The Ministry of Finance is exploring ways to streamline tax declaration procedures and enhance online services for taxpayers. There may also be adjustments to income tax rates and tax brackets based on economic conditions. Keeping an eye on these trends can help every person working in Poland plan their finances and ensure tax compliance for the tax year.