Tax Guide Poland
Financial Year – 1 January – 31 December
Currency – Polish złoty (PLN)
Corporate Tax Summary
Residence – A company is resident in Poland if it has its registered office or management in the territory of the Republic of Poland (hereinafter referred to as „Poland“). The condition of having the management board in Poland should not only be seen in the formal sense (i.e. the seat of the management board), but also in the sense of exercising a set of activities in Poland which functionally constitute the overall process of managing its activities and assets.
Basis of Taxation – If companies have their registered office or management board in Poland, taxpayers are subject to tax on all their income, regardless of where it is earned. Taxpayers (companies) without a registered office or management board in Poland are subject to tax liability only on income that they generate in Poland. In particular, income (revenue) generated in Poland by taxpayers without a registered office or management board in Poland includes:
- All types of activities carried out in Poland, including through a permanent establishment located in Poland.
- Real estate or rights to such real estate located in Poland, including the sale of it in whole or in part or the sale of any rights to such real estate.
- Securities and derivative financial instruments other than securities admitted to public trading in Poland as part of a regulated stock market, including those obtained from the sale of these securities or instruments and from the exercise of rights arising therefrom.
- Transfer of ownership title to shares (stocks) in a company, total rights and obligations in a company other than a legal entity or titles of participation in an investment fund, collective investment institution or other legal entity, or for receivables resulting from the possession of these shares (stocks), total rights and obligations or participation titles – if at least 50% of the value of the assets of such a company, a company which is not a legal entity, investment fund, joint investment institution or legal entity, directly or indirectly, is real estate located in Poland or the right to such real estate.
- The transfer of ownership of shares (stocks), all rights and obligations, participation titles or similar rights in the real estate company;
- Regulated receivables, including those made available, paid or deducted by natural persons, legal entities or organisational units without legal personality, domiciled or with a registered office or management board in Poland, regardless of the place of conclusion of the contract and performance of the service.
- Unrealised gains.
| Reference | ||
| Corporate Income Tax Rate (%) | 19% / 9% / 5% / 0.035%* (*Income tax on commercial real estate with a value exceeding PLN 10,000,000) / 10% Minimum Income Tax | 19% of tax base. 9% of tax base on revenue (income) other than from capital gains – in the case of taxpayers whose revenue achieved in a tax year did not exceed the amount expressed in PLN corresponding to the equivalent of EUR 2,000,000, converted according to the average EUR exchange rate announced by the National Bank of Poland on the first business day of the tax year, rounded to 1,000 PLN (this tax rate applies to taxpayers having the small taxpayer status). 5% of tax base tax on eligible income obtained from eligible intellectual property rights. Income tax on commercial real estate, which: 1) Is the property or joint ownership of the taxpayer. 2) Has been brought into use in whole or in part on the basis of rent, lease or other contract of a similar nature. 3) Is located in Poland. – Amounts to 0.035% of tax base for each month 10% Minimum Income Tax covers taxpayers who incur a tax loss on their operating activities for a given tax year or whose share of income in revenue from operating activities did not exceed 2%. |
| Branch Tax Rate (%) | 19% / 9% / 5% / 0.035%* (*Income tax on commercial real estate with a value exceeding PLN 10,000,000) / 10% Minimum Income Tax | As above |
| Withholding Tax Rate: | ||
| Dividends – Franked | Not applicable | Not applicable |
| Dividends – Unfranked | 19 % | Income tax on revenue from dividends and other income (revenue) from the share in profits from legal entities having their registered office or management board in Poland paid to non-Polish tax residents. The 19% rate applies taking into account the conventions on the prevention of double taxation to which the Republic of Poland is a party. No withholding tax is levied on dividends paid to EU or EEA parent companies (EU Parent-Subsidiary Directive) to the extent that the parent company has held at least 10% of the capital of the subsidiary continuously for at least 2 years and the parent company does not benefit from the exemption from income tax on the entirety of its income, regardless of the source. The exemption also applies when the period of uninterrupted ownership of at least 10% of the capital of the subsidiary, by the parent company obtaining income from dividends or other income from participating in the profits of a legal entity, expires after the day of obtaining that income (revenue). The exemption applies also to parent companies from the Swiss Confederation to the extent that the parent company has held at least 25% of the capital of the subsidiary continuously for at least 2 years. |
| Dividends – Conduit Foreign Income | n/a | |
| Interest | 20% | Income tax on revenue earned in Poland from interest paid to non-Polish tax residents. The 20% rate applies taking into account the conventions on the prevention of double taxation to which the Republic of Poland is a party.There is a possibility of applying a preferential rate arising from the conventions upon meeting specific conditions. No withholding tax is levied on interests paid to EU or EEA parent, sister companies (the EU Interest-Royalties Directive). It is required that the parent company holds at least 25% of the capital of the subsidiary continuously for at least 2 years. |
| Royalties from Intellectual Property | 20% | Income tax on revenue earned in Poland from copyright or related rights, rights to inventive designs, trademarks or ornamental designs, including from the sale of those rights, from compensation for disclosure of a secret of a recipe or production process, for use or right to use an industrial device, including means of transport, a commercial device or a scientific device, for information associated with industrial, commercial or scientific experience (know-how) paid to non-Polish tax residents. The 20% rate applies taking into account the conventions on the prevention of double taxation to which the Republic of Poland is a party. There is a possibility of applying a preferential rate arising from the conventions upon meeting specific conditions. No withholding tax is levied on interests paid to EU or EEA parent, sister companies (the EU Interest-Royalties Directive). It is required that the parent company holds at least 25% of the capital of the subsidiary continuously for at least 2 years. |
| Fund Payments from Managed Investment Trusts | 19 % | |
| Branch Remittance Tax | Not applicable | |
| Net Operating Losses (Years) | ||
| Carry Back | ||
| Carry Forward | The taxpayer may deduct the amount of losses from the source of revenue incurred in the tax year from: 1) The income obtained from this source in the next successive five tax years, except that the amount of the deduction in any of these years may not exceed 50% of this loss or 2) Make a one-time deduction of income from this source in one of the next five consecutive tax years of an amount not exceeding PLN 5,000,000; the non-deducted amount is settled in the remaining years of this five-year period, except that the amount of the reduction in any of these years may not exceed 50% of the amount of this loss. |
Individual Tax Summary
Residence – A natural person is a resident of Poland, if:
- He/she has a centre of personal or economic interests in Poland (centre of vital interests) or
- He/she stays in Poland for more than 183 days in a tax year.
Basis of Taxation – Natural persons, if they reside in Poland, are subject to tax on all their income (revenue) regardless of the location of the sources of income (unlimited tax liability).
Natural persons, if they do not have a place of residence in the territory of the Republic of Poland, are subject to tax only on income (revenue) generated in Poland (limited tax liability). Income (revenue) generated in Poland includes, in particular, the income (revenue) from:
- Work performed in Poland on the basis of a service relationship, employment relationship, outwork and cooperative employment relationship, regardless of the place of payment of remuneration.
- Activities carried out personally in Poland, regardless of the place of payment of remuneration.
- Business activities conducted in Poland, including through a permanent establishment located in Poland.
- Real estate or rights to such real estate located in Poland, including the sale of it in whole or in part or the sale of any rights to such real estate.
- Securities and derivative financial instruments other than securities admitted to public trading in Poland as part of a regulated stock market, including those obtained from the sale of these securities or instruments and from the exercise of rights arising therefrom.
- Redemption, repurchase, buyback and other forms of liquidation of participation units in capital funds established under the laws of Poland and the paid transfer of these participation units;
- Transfer of ownership of shares (stocks) in a company, total rights and obligations in a company other than a legal entity or titles of participation in an investment fund, collective investment institution or other legal entity, or due to receivables resulting from the possession of these shares (stocks), total rights and obligations or participation titles – if at least 50% of the value of the assets of such a company, a company which is not a legal entity, investment fund, joint investment institution or legal entity, directly or indirectly, are real estate located in Poland or the right to such real estate.
- The transfer of ownership of shares (stocks), total rights and obligations, participation units or similar rights in the real estate company;
- Regulated receivables, including those made available, paid or deducted by natural persons, legal entities or organisational units without legal personality, domicile, registered office or management in Poland, regardless of the place of conclusion of the contract and performance of the service.
- Unrealised gains.
Filing Status – Joint settlement with the spouse is allowed, except when one of the spouses conducts business activities taxed with a 19% flat tax rate.
Personal Income Tax Rates
| Taxable Income | Tax Payable – Residents | Tax Payable – Non Residents |
| Up to PLN 120,000 | 12% minus tax reduction amount PLN 3,600 | 12% minus tax reduction amount PLN 3,600 |
| Over PLN 120,000 | PLN 10,800 +32% of surplus over PLN 120,000 | PLN 10,800 +32% of surplus over PLN 120,000 |
Alternatively, a taxpayer conducting business activities may choose to tax all income with a 19% income tax flat rate.
In addition, there is the possibility of taxing certain revenues from operations with a lump-sum tax on recorded revenues which, depending on the type of business, is: 17% / 15% / 14% / 12% / 10% / 8.5% / 5.5% / 3% and 2%.
Goods and Services Tax (GST)
| Rate | 23%, 8%, 5%, 0% From 1 January 2011, the standard rate is 23%. The following reduced rates are used in the national VAT system: 8% and 5%. An 8% rate is applicable, among others, to:
A 5% tax rate is applicable to the goods listed in Annex 10 of the VAT Act, which covers basic food products (e.g. some fruit and vegetables, bread, dairy products, meat and meat products, cereal products, flour, cereals, pasta , specific beverages), printed and published books on discs, tapes and other media, as well as specialist magazines. A 0% rate is applicable, among others, to:
The scope of taxation with a tax rate of 0% of the above mentioned goods and services, as well as the conditions for applying this rate, results from the provisions of Art. 83 of the VAT Act and the provisions of the Decree of the Minister of Finance on goods and services for which the tax on goods and services is reduced, and the conditions for applying these reduced rates. |
| Taxable Transactions | The provisions on VAT apply to the following activities taxed in Poland (the provisions indicate the rules for determining the place of performance of the supplied services):
A transfer of a single-purpose voucher made by a taxpayer acting on its own behalf is also considered to be the supply of goods or services. This transfer of single-purpose vouchers shall be considered the supply of goods or services to which the voucher relates. |
| Registration | Entities are required to submit a registration application to the head of the tax office before the date of the first taxable operation. Entities that benefit from a subject exemption and entities that perform only tax-exempt activities may submit a registration application. Subject exemption is granted to taxpayers whose sales value did not exceed the total amount of PLN 200,000 in the previous tax year. The amount of tax is not included in the value of sales. Taxpayers with an annual turnover exceeding PLN 200,000 are required to register as VAT payers. The subject exemption does not apply to taxpayers providing the following services:
The subject exemption does not apply also to taxpayers not having registered offices for economic activity in the territory of Poland. |
| Filing and Payment | Taxpayers submit VAT returns and pay tax on a monthly basis (up to the 25th of the month following the end of the month). Small taxpayers can submit VAT returns and pay tax on a quarterly basis (up to the 25th of the month following the end of the quarter). A small taxpayer is a VAT taxpayer whose sales value in the previous tax year (including tax amount) did not exceed the amount expressed in PLN which corresponds to the equivalent of:
|
Other Taxes Payable
| Tax | Reference |
| Payroll Tax | Not applicable |
| Payroll Tax | Stamp duty is applicable to: 1) Individual cases in the area of public administration:
2) Submission of a document confirming the granting of power of attorney or proxy, or extract, excerpt or copy thereof – in a matter of public administration or in court proceedings. |
| Land Tax | Real estate tax is applicable to: land, buildings or parts thereof, structures or parts thereof related to conducting economic activity. The tax is charged to: owners, perpetual usufructuaries, independent owners and, in some cases, owners of dependent real estate or parts thereof owned by the State Treasury or a local government unit. The tax rate is determined by the resolution of the commune council. It takes into account the upper limits of rates which result from the Act of 12 January 1991 on local taxes and fees. |
Last updated: 15.03.2024
