PIT is the personal income tax. At the beginning of each year, every employee receives a PIT-11 from their employer.
But not everyone knows what it is or what to do with it. Let's take a look at this topic!
People who live in Poland and earn income in Poland have tax obligations. This means they must pay tax in Poland on all income earned. The tax return must be filed between 1 February and 30 April. Even if you are already in Poland, you are still required to file a tax return for the previous year. Advances to the tax office.
During the year, the employer withholds amounts from your salary on behalf of the Polish tax office, health insurance fund, and so on.
These taxes account for the difference between gross and net earnings. These deductions for a given year are called advances. And they don't need to be exact to the grosz.
It may happen that during the year the employer pays slightly more or slightly less tax on your salary.
Compare that amount with what has already been paid during the year (the total of all advances). At year-end you are required to file a tax return that shows your entire annual income, all taxes already paid during the year, and any applicable benefits. With a simple calculation you get the tax amount you must pay on all income earned in the previous year.
What is PIT-11?
PIT-11 is a document with a table containing data about your income for a given year and the taxes paid. If you work in Poland, your employer withholds income tax from your salary. By the end of February the employer must send you a PIT-11 form – a document containing information about the income you earned working for them during the previous tax year and about the deductions made from your salary for income tax. If you worked in several places (for different employers), obtain a PIT-11 from each employer. PIT-11 is issued when a foreigner is a tax resident of Poland. It indicates the taxpayer's place of residence in Poland. PIT-11 will be sent both to the employee and to the tax office competent for the employee's place of residence in Poland. After receiving the PIT-11, the employee is required to file a PIT-37 tax return.
What is PIT-37?
PIT-37 is the annual tax return that must be filed for the last year worked in Poland. If you don't run a business, you should use the PIT-11 to complete a PIT-37 and file it with the relevant tax authority.
Deadlines
The PIT-37 declaration must be filed by 30 April of the following year. For example, the PIT-37 return for 2023 must be filed by 30 April 2024.
At the same time, you are required to pay any tax due if the final settlement shows that the deductions from your income were less than the tax owed on the total income. You will see whether you need to pay more, or whether you have already paid more than necessary and can reclaim the difference. The tax office will check all the data and, if no errors are found, will refund your money. Otherwise, they will expect you to pay the shortfall.
How to file a tax return in Poland. The declaration can be filed on paper at one of the tax offices competent for your place of residence, or electronically over the Internet. Filing online is the fastest and most convenient option, eliminating the need to waste time in long queues at the tax office. Another advantage of this method is that the software automatically performs all the necessary calculations, minimising the chance of error.
What happens if you don't pay taxes on time?
Foreigners living in Poland who take up work abroad often assume the tax authorities won't find out about their foreign income. However, this is far from the case.
First, tax inspectors can obtain information about income available in Ukrainian/foreign banks. For example, if a foreign employer transfers wages to an account in a Ukrainian bank, or if an officially unemployed person opens a deposit for a large amount.
Second, there is an exchange of tax information between Ukraine and many countries.