Poland
Corporate taxes and other direct taxes
Polish companies are taxable on their worldwide income. Non-resident companies are taxable only on Polish sources of income, subject to DTT. The standard CIT rate is 19%. The preferential CIT rate for ""small taxpayers"" (whose sales revenue in the previous FY did not exceed the PLN equivalent of EUR 2,000,000) is 9%. This rate also applies for newly-created entities (additional requirements also apply). In Poland, CIT is generally payable on income. Tax deductible costs exceeding revenues in any given FY constitute a loss which may be deducted from income over the next 5 consecutive years (no more than 50% of a loss can be offset in any one year). Starting from tax losses incurred in FY2019, it is possible to activate the tax loss of a given tax year as a one-off amount up to PLN 5,000,000. The surplus may be settled in line with the general rule described above. As of January 1, 2022, changes in the regulations concerning debt financing costs entered into force. Expenses for debt financing are qualified as tax deductible costs to an amount of no more than 30% of EBIDTA or an amount not exceeding PLN 3,000,000 (depending on which amount is higher).
Interest, royalties, and certain types of immaterial services paid to non-Polish residents are, as a rule, subject to a 20% WHT rate, and dividends (or dividend-like incomes) are subject to a 19% WHT rate (unless, in both instances, an exemption or reduced rate is available under an applicable DDT or the EU Interest-Royalties Directive exemption applies). As of January 2022, a pay & refund mechanism entered into force. This only applies to passive payments exceeding PLN 2 Million per annum summed for one non-resident. The excess amounts are subject to a base WHT rate pursuant to the CIT Act (19% or 20%) and the tax remitter can only apply for a WHT refund if the payment could be exempt or qualifies for a reduced rate from the proper DTT. It is also possible to apply for an opinion on the application of preference (additional requirements also apply). There are also strict restrictions concerning due diligence procedures (e.g. beneficial owner statement; verification whether the recipient runs a real business activity in its state of residence).
Real property tax and transport tax are charged as local taxes in Poland. Real property tax is paid by owners of real estate. Banks and financial institutions are taxable at a 0.0366% rate (monthly levy) of their total assets (exceeding the indicated minimum value).
Level of attention paid by Tax Authority:
VAT and other indirect taxes
As a rule, the standard VAT rate is 23%. Preferential rates of 8% and 5% apply to certain goods and services. Other goods and services (e.g. exports, intra-Community supplies of goods, international transport services) may be zero-rated or exempt. Due to inflation during the period from February 1, 2022 to December 31, 2022, reduced rates apply to e.g. fuels; heat; natural gas; certain food products. A 0% VAT rate applies to some food products until March 31, 2024.
Other indirect tax types in Poland include excise duty and gambling tax. Some civil acts such as contracts of sale, loan agreements, and foundation deeds of partnerships or companies, if not subject to VAT, may be subject to civil law activity tax (CLAT), the rates of which range from 0.1% to 2%. Transactions related to filling a power of attorney and public administration actions (submitting application forms, issuing certificates, granting permissions, etc.) are subject to stamp duty.
| VAT options in Poland |
Applicable / limits |
| Distance selling |
The OSS system is applicable from July 1, 2021
|
| Call-off stock |
 |
| VAT group registration |
|
| Cash accounting - yearly amount in EUR (approx.)* |
EUR 2 000,000/ year |
| Import VAT deferment |
|
| Local reverse charge |
Reverse charge mechanism applies to gas supplied in the gas system, electricity supplied in the electricity system, and greenhouse gas emission allowance transfer services when such supplies are made directly or through an authorized entity on a commodity exchange, a regulated market, or an organized trading platform. |
| Option for taxation |
| - letting of real estate |
For residential purposes (exempt), for commercial purposes (23%)
|
| - supply of used real estate |
Exempt (additional requirements needed)
|
| VAT registration threshold* |
PLN 200,000/year
(approx. EUR 50,000)
|
Personal income tax / Social security system
PIT is calculated on income. However, the income calculation differs depending on the source from which the income is earned (for example, employment contract, sole traders’ activity, personally performed activities, etc.). PIT is calculated according to a progressive tax scale at a rate of 12% (below income amount of PLN 120k per year) to 32% (above income amount of PLN 120k per year). A specific rate also applies to individuals pursuing business activities as sole proprietorships or partners in partnerships, who may opt for a flat 19% PIT rate. The tax-free amount is PLN 30,000 (depending on the value of the tax base). The income of taxpayers who are under the age of 26 and receive their income based on an employment relationship, a mandate contract, a post-graduate internship, or a student internship is tax-free up to an amount of income not exceeding PLN 85,528 in the given tax year.
Employee Capital Plan (ECP): Payments to PPK are made both by the employer and the plan participant. The basic payment to PPK made by the plan participant is equal to 2% (as of January 1, 2022, this could be 0.5% when additional requirements are fulfilled) of the salary used as the base for the calculation of retirement and disability SSC, while the employer pays 1.5% of the salary used as the base for the calculation of retirement and disability SSC.
Personal income falls under the social insurance system: employee’s SC (capped) equals 13.71%; employer’s contributions equal approximately 20.48%. Additionally, the individual is required to pay a 9% health insurance contribution. As of January 1, 2022, it is not possible to lower the income tax by the amount of the health insurance contribution and deduct 7.75%. The examples below show the employer’s and the employee’s costs in case of the minimum wage level and the average wage in the private sector.
Wage related taxes
in Poland |
Minimum wage***** |
Average wage in private sector**** |
| Exchange rate PLN / EUR* |
in EUR |
in PLN |
in EUR |
in PLN |
| 4,327 |
950 |
4,242 |
1,795 |
7,768 |
| Total wage cost |
1196 |
121.98% |
2,189 |
121.98% |
| Employer's social security** |
176 |
17.93% |
322 |
17.93% |
| Other insurance (approx.) |
25 |
2.55% |
46 |
2.55% |
| Contribution to the PPK 1,5% |
15 |
1.50% |
27 |
1.50% |
| Gross salary |
980 |
100.00% |
1,795 |
100.00% |
| Employees` contributions |
134 |
13.71% |
146 |
13.71% |
| Healthcare insurance |
76 |
9.00% |
139 |
9.00% |
| Personal income tax*** |
7 |
12.00% |
116 |
12.00% |
| contribution to the PPK 2% |
20 |
2.00% |
36 |
2.00% |
| Net salary |
743 |
75.81% |
1,257 |
70.03% |
*Average exchange rate announced by National Bank of Poland as of February 14th, 2023
**Capped at income of PLN 208 ,055.00 for pension and retirement contributions
***Taxable base = gross salary – employee’s contributions – statutory tax deductible costs
****Average wage in private sector as of January 2022 announced by the Main Statistical Office
*****Minimum wage January- June 3,490.00
1. Minimum wage July- December 3,600.00
2. (Revenue x (-7.35%) + PLN 819.08) ÷ 0.17, for Revenue higher than PLN 8,549 and not exceeding PLN 11,141