TAX in Poland

Let’s get things straight about taxes in Poland. Since I haven’t lived in this country for so long, I’m learning about taxes just like you. With the difference that my mom knows accounting and will probably do my PIT. Lucky me! 

However, I’m gonna use her knowledge and share it with you, so things like taxes don’t scare you anymore. 

If I’m a foreigner, do I have to pay taxes in Poland?

The answer is yes‼️ if you are a resident of Poland and you obtained any income here, you have to pay taxes on it.  A (tax) resident of Poland is person whose stay in Poland is longer than 183 days a year. 

I’m going to explain it using my friend as an example:

He is an Australian currently living in Wroclaw. He moved to Poland to teach English in a Language School. So, he works for a Polish employer on a full-time contract in Poland. 

Question: Does he have to pay taxes in Poland?

Answer: Yes, he does. He lives and works in Poland, that makes him a tax resident of Poland. He will get from his employer PIT-11, so he can make his own PIT by April 30th.

What is PESEL? DO I need one as a foreigner working in Poland?

PESEL is the Universal Electronic System for Registration of the Population used in Poland. So, in short – A PESEL number is an identification number of a person.

So, it makes life so much easier to have such number to be able to compete thetax duty in Poland.

What is PIT? Do I need to file one? Which PIT do I file? 

PIT is a Personal Tax return form, which has to be filed in the place of your residence. It is obligatory for every individual obtaining income in Poland to file PIT. 

There are any different PIT forms depending on your situation, it is best to ask an accountant for advice or call tax office. 

How do I calculate the tax?

In Poland there are 2 tax rate bands: 

1. yearly salary less than PLN 85.528 – 18%
2. yearly salary more than PLN 85.528 – 32%

Example:

                        If the taxable income equals PLN 85,528 or less (i.e. if the person has earned up to PLN 85,528 in the year), then the tax equals 18% of this base minus PLN 556.02.

                        If the taxable income exceeds PLN 85,528, then the tax equals PLN 14,839 + 32% of the amount in excess of PLN 85,528.

If you earn low income, less than PLN 3.091 in a year, you receive a refund of the advance tax payments that were paid. (There is another form for it called tax return form) 

Where to file PIT?

There are two ways, you wither do it in paper at a nearest tax office or electronically via a special software – e-deklaracje system.

How to pay income tax?

You employer when hiring will ask your permission to pay the advance income tax payments deducted from your wages. He will file PIT-2 form to the tax office. Then by the end of February, he would send you a PIT-11 form so you can use it in your tax declaration. PIT-11 will have all the information about the income you made during the financial year. 

There are 3 possible options on how the tax return can go:

1. TAX is already fully paid, no need for further action
2. You earned more than expected and more TAX need to be paid 
3. or TAX OFFICE is obliged to refund some of the money to you.

Business owners in Poland pay tax on their own on a monthly or quarterly basis.

When is the tax return due?

By 30 April every year every taxpayer (individual paying tax) must FILEa PIT tax return form in the tax office AND PAY TAX IF NECESSARY. 

You pay either in cash at the tax office, or via bank transfer.

If tax office owes you refund – you may have to wait up to 3 months for it. 

Can I file tax form for myself and wife?

It is called – joint taxation and only when individuals ARE NOT conducting their own business activity.

It is even better to do joint taxation when:

1. if spouses fall into different tax rate bands
2. one of spouses is not working
3. or if combined income is lower than the amount exempt from tax. 

There are obviously conditions for joint taxation, which are:

• spouses stay in Poland is min. 183 days in a given financial year
• must have a common marital estate
• must be married for the whole financial year which you pay tax for
• both signatures on PIT form as a statement of confirming the above conditions

How do I calculate the joint tax?

Both incomes must be calculated separately including tax deductions. Next step is to add both incomes, then divide the amount by two and calculate the tax for each spouse – IT WILL BE THE SAME FOR BOTH. You add their taxes and do the tax deductions.

In case the final tax amount is lower than total advance payments already made within the year, the couple is eligible for a tax refund.

What are the tax deductions?

Tax deductions can help you lower your taxes and pay less money to the tax office. The allowances maybe deducted either from tax or income. 

1. from income – f.g.: social security premiums

2. from tax – f.g. child benefit, health insurance premium, internet 

There is a PIT form for tax deductions, so use it if necessary. 

Where is the 1% of my tax going to?

This is going entirely to a social organization of your choice. You can find a foundation or other organization and transfer 1% of your tax to them instead of to the state budget. so calculate 1% of your tax and put it down in the correct space on your PIT form. 

What is double taxation and how it works?

There are situations when you live and work in a foreign country, but your family is back in your home country. Then it might happen that tax obligations might affect you in both countries. However, Poland has signed an international agreement to avoid double taxation with some of the countries, which means, you don’t have to be asked to pay double tax for the same income. 

It is really important to check what is the agreement between Poland and your own country, so you don’t get in trouble. 

It is good to get a Certificate of Tax Residency which would confirm your tax residence and help to avoid double taxation. Anyone can apply for it regardless of your origin if only the criteria are well met.

Where to look for assistance?

Lionall Sp. Z O.O.  www.lionall.com

• Monday – Friday 9:00 a.m. to – 16:00 p.m.
• Service in English
• ☎️ 797 867 848

Citizen Service Centrein City Council Wroclaw at:

         •        G. Zapolska street 4

         •        at Nowy Targ square 1-8

https://www.wroclaw.pl/en/citizen-service-centre

COM I on G. Zapolskiej street 4

Open:

            •           Monday – Friday: 8:00 a.m. to – 5:15 p.m.

            •           taxes and local payments: Monday – Friday: 8:00 a.m. – 3:15 p.m

COM II Nowy Targ square 1-8

Open:

            •           Monday – Friday: 8.00-17.15

            •           taxes and local payment: Monday-Friday: 8.00-15.15

Telephone information:

phone +48 71 777 77 77

SOME GOOD TIP SOURCES in ENGLISH:

http://www.migrant.info.pl/Taxes_in_Poland.html

https://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/index_en.htm