Taxes in Poland in 2024

Starting the New Tax Year in Poland: What You Need to Know

Starting the new tax year in Poland, every resident and foreigner working or running a business in the country must understand the basics of the tax system. Taxes in Poland are not only an obligation but also an essential part of financial planning. In 2024, the government made some changes to tax rates and payment procedures, so up-to-date information will help you avoid mistakes and optimize your tax payments.

Taxes in Poland in 2024 have undergone changes that affect various income categories, including salary, business income, and investments. It is essential to know what tax forms you need to prepare and what rates apply to your income. It is also important to pay attention to the deadlines for submitting declarations to avoid penalties for late submission.

Personal Income Tax in Poland (PIT)

Personal income tax in Poland for 2024 continues to follow the basic principles of previous years, but with some updates that must be considered. It is important to know which tax declaration forms you need to fill out depending on your sources of income. Residents earning income within the country use the PIT-37 form for labor income, while income from abroad requires filling out the PIT-36 form.

Corporate Income Tax in Poland (CIT)

CIT (Corporate Income Tax) in Poland is a tax on the profits of companies registered in Poland. Currently, the CIT rate is 9% for companies whose revenue in the year does not exceed the equivalent of 2 million EUR and 19% for companies whose revenue exceeds the equivalent of 2 million EUR, regardless of the type of business.

The tax is calculated on the profit that the company earns during the year after deducting possible expenses. In Poland, expenses for salaries, rent, equipment, investment in research and development, land tax, etc., are deductible.

Companies registered in Poland must submit an annual tax report by the end of the third month of the following year, specifically by March 31.

Additionally, from 2024, changes in tax rates have been introduced, which may affect the total amount of taxes withheld from your income. For example, increasing the tax-free allowance reduces the tax burden for low-paid workers. It is also important to note that proper tax planning and understanding of the applied rates and deductions can significantly reduce your tax base and the amount to be paid.

Changes in Poland’s Tax System

In 2024, significant changes were introduced to Poland’s tax system, affecting various aspects of taxation, particularly for individuals and entrepreneurs. These changes include modifications to tax rates and the rules for submitting tax returns. These changes are intended to simplify the tax payment process and make it more transparent.

Changes in tax rates: The new system includes revised tax rates that could affect overall tax burdens, especially for entrepreneurs. Electronic tax returns: To speed up and simplify the process, more attention is being paid to electronic tax returns. This will allow taxpayers to reduce the time spent submitting documents and decrease paperwork.

These changes require careful review by anyone subject to taxation in Poland, as they may significantly impact financial planning and obligations. Taxpayers, especially entrepreneurs, are advised to familiarize themselves with the new rules and consult a tax advisor if necessary.

Taxes and Contributions from Salary in Poland

Taxes and contributions from salary in Poland play a significant role in financial planning for both employees and employers. It is essential to understand which taxes and social contributions are deducted from salaries and what obligations arise for each party. Poland’s tax system requires employers to withhold taxes and contributions directly from employees’ salaries, including:

• Income tax: This depends on the income level and may vary depending on the applicable tax scale.
• Social contributions: These include pension contributions, accident insurance, health insurance, and others that form part of the employee’s social package.

Employees need to understand which amounts are deducted from their salary and at which rates. Employers, on the other hand, must strictly follow the rules for withholding and transferring these contributions to avoid possible tax violations.

Youth Tax Benefits: How to Avoid Taxes Until Age 26

The tax benefit for young people under 26 is a significant relief in Poland’s tax system, designed to support youth at the beginning of their careers. If a young person’s annual income does not exceed 85,528 PLN, no tax is deducted from that amount. This allows young people to keep more of their earned income, encouraging them to enter the job market more actively and improve their financial position.

Who Doesn’t Pay Taxes in Poland?

In Poland, there are certain categories of people who may be fully or partially exempt from paying taxes. This applies not only to those temporarily staying in the country but also to other groups of people:

• Foreign students and researchers: People who come to Poland for study or participation in scientific projects may be exempt from paying taxes if their income does not have a Polish source. This is regulated by bilateral agreements on tax residency and international treaties to which Poland is a signatory.
• Diplomatic staff and employees of international organizations: Under international law, diplomatic staff working in embassies and consulates, as well as employees of international organizations, may be exempt from taxes on income earned in the course of their official activities.

Additionally, special tax conditions may apply to:

• Pensioners and the disabled: Certain pension categories and social benefits may be eligible for tax benefits or complete tax exemptions.
• Income from international transport operations: Owners of vehicles involved in international transport may benefit from special tax regimes.

How to Pay Less Taxes in Poland for Individuals

Taxes in Poland for individuals can be significantly reduced by using tax deductions and allowances. Here are some tips on how to reduce your tax burden:

• Using standard tax deductions: Poland provides standard deductions, such as for children, education, or internet costs, which can be automatically applied to your taxable income.
• Investments in pension funds: Contributions to pension programs often qualify for deductions, which can significantly reduce your taxable base.

Also, keep in mind:

• Medical expenses: Expenses for medical services and medications not covered by insurance can also be used to reduce taxable income.
• Charitable donations: Donations to charity can be deducted from your taxable base up to a certain percentage of income.

Conclusion and Recommendations

Being aware of taxes in Poland and planning your finances ahead of time can play a crucial role in optimizing tax payments. It is important not only to monitor changes in tax legislation but also to actively use all available options to reduce the tax burden:

• Use reliable sources of information: To understand current tax requirements and opportunities, use official resources such as tax authority websites or consulting agencies.
• Consult with tax specialists: If you have complex tax situations or want to maximize the use of available benefits, it is advisable to consult qualified tax advisors.

Smart financial and tax management can help you not only avoid potential legal issues but also significantly reduce your annual expenses. Plan your finances ahead of time and actively use available tax deductions and benefits to ensure a more successful and financially advantageous year.