- 2 October 2020
- Posted by: Przemysław Bukowski
- Category: Articles
To start a business in Poland, you first need to study and get acquainted with a fairly important topic – taxes in Poland. In this article, we will once again talk about what taxes exist in Poland and what rates are in force in 2020.
Important! To run any business, you will need to obtain a tax identification number. NIP (Tax Identification Number) is a ten-digit tax identification number that is used to pay taxes in Poland. This number will henceforth be used throughout the life of your business and will identify you as a taxpayer.
Consider the main forms and rates of taxation in Poland in 2020.
Personal income tax in Poland (PIT).
All persons residing in Poland and having income from business activity, as well as income from employment contracts, civil law contracts and other contracts, are obliged to pay tax on the amount of this income.
Polish taxpayers of personal income tax can choose one of the taxation options:
- The first option is a scale with progressive rates and two thresholds – 17% and 32%. The scale depends on your annual income, and if it is lower than PLN 85,520, you pay 17%, if the amount is higher than 32%.
- The second option is a flat rate of 19% of all income, regardless of its amount. It should be noted that in this case you are deprived of a significant number of deductions and benefits. Basically, this indicator is used by people running a business.
Corporate income tax in Poland (CIT), i.e. income tax.
This tax applies to all legal persons registered and earning income in Poland. The tax is calculated on the total income for the year excluding VAT. In 2020, the following tax rates apply:
- Total income up to EUR 1.2 million – 9%.
- Total proceeds above 1.2 million EUR – 19%.
Tax on goods and services in Poland (VAT).
Tax included in the price of goods and services.
The basic tax rate is 23%.
Tax can have different benefits of 3%, 5% and 8%. It depends on the different types of services and goods.
Other taxes in Poland.
- agricultural tax
- forest tax
- from civil actions
- property tax
- inheritance and donation tax
- car tax
- tonnage tax
- excise duty
- gambling tax
Payroll tax in Poland.
In addition to compulsory personal income tax, there are a number of social security contributions that apply to all employees. These contributions are paid by all public and private companies. You pay jointly – the employee pays part, the company part. The percentage is shown in the table below:
|Types of tax relief||Total, %||Employer,%||Company,%|
|Fund for the disabled||8||1,5||6,5|
|Health insurance fund||2,45||2,45||–|
From August 1, 2019. In Poland, young people up to the age of 26 are exempt from personal income tax (PIT) if their annual income does not exceed PLN 85,520. If your income exceeds this amount, you will only be taxed on the excess. The zero PIT rate applies to young people employed under an employment contract and a specific specific contract. Combining different sources of income is allowed and does not limit your entitlement to benefits.
If you have any questions, you can always write to us at firstname.lastname@example.org and we will provide you with all the necessary information.