Types of taxes in Poland 2024
Friends, let's take a look at the most basic and principal taxes:
- tax on goods and services (VAT) - VAT
- personal income tax - PIT
- corporate income tax - CIT
VAT in Poland
As in other European countries, Poland has a tax on goods and services – Podatek od towarów i usług, the so-called value-added tax.
The standard VAT rate is 23%, but Polish law provides for a number of exceptions where a preferential rate can be applied.
For the export of goods to the territory of the European Union, the VAT rate is 0%.
In Poland, preferential rates mean reduced rates of 8% and 5% that apply to certain goods and services.
The 8% rate applies to:
- newspapers and magazines, except for special-topic newspapers;
- agricultural services;
- medicines and pharmaceutical products;
- tickets to cultural events;
- the construction industry.
- The 5% rate covers goods such as:
- books;
- special-topic newspapers, etc.
From 1 February 2022, Poland reduced VAT to 0% on food products, as well as on gas. VAT on thermal energy was reduced from 8% to 5%, and on fuel from 23% to 8%.
CIT tax
CIT – Polish corporate income tax.
The standard CIT rate is 19%, while Polish law provides for a preferential 9% rate – the tax rate for small companies whose annual turnover did not exceed €1,200,000.
Important: the 9% rate cannot be applied to companies planning to provide financial services in Poland.
The tax base in this situation is dochód – income. "Dochód" in Polish law is the difference between przychód (revenue) and koszty (business expenses).
The choice of settlement type with the treasury – monthly or quarterly – does not affect the CIT rate for the company.
The obligation to pay taxes is determined based on whether the company's management board has a registered office in Poland. If it does, all income is taxed regardless of where it is earned; if not, only what the company has earned in Poland is taxed.
PIT tax
PIT is the traditional "personal income tax".
Note: if you live in Poland for more than six months and are employed by a Polish company, you are required to pay taxes to the Polish treasury.
If you stay in Poland for more than 183 days a year, you automatically become a tax resident.
The tax-free amount for annual personal income has been increased under the new "Polski Ład" reform and currently (February 2024) stands at 30,000 zł.
Income up to 120,000 zł is taxed at the 12% rate (less the so-called annual tax-reducing amount of 3,600 zł).
Income above 120,000 zł is taxed at the 32% rate. If you have earned income above this amount, you will pay 12% on the first 120,000 zł and 32% on the amount above 120,000 zł.
Note: under Polish law, as an individual you are required to report the income you have earned to the treasury.
To do this, you must file, by 30 April, information about the income earned or losses incurred – the annual PIT declaration.
Responsibility for an incorrectly calculated or incorrectly completed PIT lies with you.
If you work for a Polish company, then, under the standard procedure, you will receive a PIT-11 form from the finance department and will be responsible for submitting the completed PIT-37 form yourself.