The Polish tax year is the calendar year.
The employer is obligated to file with the tax office the tax return, including information on the employee's income and tax advances withheld with respect to that income. The above tax return is filed only once for the whole year.
The final PIT settlement, in general, is made by individuals themselves. With some exceptions, individuals are obligated to submit the annual return for the tax year by 30 April of the following year. As of 1 January 2019, there is a possibility of completing the tax return forms by the tax authorities. The taxpayer has a possibility to revise the input data. Such prepared tax return form is considered as filed within the statutory deadline. This also reduces the risk of exceeding the deadline for filing.
Married taxpayers who are tax residents in Poland may, under some conditions, choose between filing their Polish tax return jointly or separately. Generally, it is more advantageous to file jointly if one of the spouses does not derive any income subject to taxation or if that person’s income is subject to a lower tax rate than the tax rate applicable to the income derived by the spouse.
Individuals may benefit from a joint reconciliation if the following conditions are fulfilled:
- they are married for the entire tax year or from the date of marriage to the last day of the tax year,
- both have joint property co-ownership.
- neither of them conducts business activity that is taxed differently than at progressive tax rates up to 32%.
Moreover, taxpayers who are not resident of Poland also have the right to benefit from joint spousal taxation; however, in addition to the above, they need to meet the following conditions: (i) they have a place of residence in an EU/EEA country or in Switzerland and they have a tax residency certificate of this country, and (ii) at least 75% of their joint worldwide revenue is derived in Poland in a given year.
Payment of tax
The employer is obligated to withhold the employee’s monthly advance payments. The advance payment for a particular month should be remitted by the 20th day of the following month.
The taxpayer has to pay the difference between the annual tax due and total amount of advance payments made during the year by 30 April of the following year.
However, employees employed under a foreign employment contract, as well as due from the earned income.
Individual bank accounts for taxes
As of 1 January 2020, each PIT, CIT, and VAT payer and remitter should transfer all of their Polish tax liabilities concerning the above taxes to their individual tax account (so called micro account) regardless of whether such payments will concern one’s liabilities for 2020 or for prior years.
The micro account number is to remain the same even if one changes their residency address, firm’s seat, surname, or tax office that is relevant for a given taxpayer or tax remitter.
Each micro account will include one’s relevant tax identification number. For the majority of individual taxpayers, this number will be the PESEL number. For all corporate taxpayers, entrepreneurs, tax, or social security remitters, as well as certain groups of individuals (e.g. those conducting business activity or those not being subject to a PESEL register), the NIP number will be appropriate.
Tax audit process
The control of Polish taxation is divided between two departments: fiscal offices, which administer and collect tax, and fiscal chambers, which deal with appeals against tax liabilities. The tax authorities must review the matter within two months after the appeal is submitted. An appeal does not stop collection of tax. However, collection may be suspended if it is reasonable, due to the interests of the taxpayer, or if the appeal is not considered within two months.
If the above procedure is exhausted, a petition against an appeal decision can be made to the Administrative Court. The petition can be made by a taxpayer within 30 days of the final decision and by a prosecutor within six months, even if the proceedings have not been exhausted.
Statute of limitations
Tax liability expires five years after the end of the calendar year in which the tax payment deadline passed. There are also situations when the statute of limitations can be suspended or interrupted (e.g. litigation).
Topics of focus for tax authorities
In case of a tax refund resulting from the taxpayer’s self-assessment, the tax authorities may initiate a tax audit.
According to recent statements from the MoF, the tax authorities as regards tax audits are concentrated on corporations (i.e. transfer pricing issues, VAT frauds, and tax restructuring), however may also embrace areas of business activities of individuals.