Polish tax residents pay PIT on their worldwide income. Non-residents are subject to Polish PIT on their Polish-sourced income only.
Personal income tax rates
General PIT rules provide for the rates shown in the following table:
|Annual taxable income (PLN)||Tax on column 1 (PLN)||Tax on excess|
|0||85,528||17%* of the base less the amount decreasing tax**|
*As of 1 August 2019, revenue under an official relationship, employment relationship, contract work, cooperative employment relationship, and mandate contracts received by a taxable person under the age of 26 is exempt from paying PIT, up to no more than PLN 85,528 in a given financial year.
**The amount decreasing tax varies from PLN 1,440 to PLN 0.01 and needs to be calculated individually based on taxable income (see Personal allowances in the Other tax credits and incentives section).
The tax-free amount is set at PLN 8,000. This means that taxpayers earning less per year will be exempt from paying tax. On the other hand, in the case of earnings exceeding the minimum threshold, taxpayers will apply a degressive tax-free amount.
Individuals running business activities (as sole traders or as partners in partnerships) can opt for a flat 19% income tax rate or lump sum taxation or so called “tax card”, subject to certain conditions.
Special rules for non-residents
Specified types of income, if gained by non-residents, are subject to special treatment. Namely, they are taxed at a flat rate of 20% calculated on revenue (cost deductions are not allowed) unless a DTT between Poland and the individual’s country of residence provides otherwise. These types of earnings include the following:
- Revenue from copyrights and other intellectual property (IP), such as trademarks, patents, and designs (including revenue from sale of the rights in question).
- Income from transfer of technology and know-how.
- Remuneration for leasing industrial, commercial, or scientific equipment.
- Income from independent work in the fields of art, literature, science, education, journalism, and sport (including income from participation in artistic, scientific and cultural competitions).
- Income from work commissioned by national or local authorities or administrative bodies, courts, prosecutors.
- Income received as fees for membership in boards of directors, supervisory boards, committees, and other decision-making bodies of legal entities.
- Income from rendering personal services based on the agreement with a natural person or other entity as long as these services are not rendered within the scope of independent business activity (i.e. they are not offered to the public).
- Income received from activities performed personally under management or similar contracts.
As of 1 January 2019, individuals who derive in a tax year income exceeding PLN 1 million are required to pay solidarity tax at the rate of 4% on the excess of this amount. An obligation of submitting a separate tax declaration by 30 April of the following tax year will also apply.