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 rate (PLN)|
|0||120,000||17%* of the base less the amount decreasing tax (PLN 5,100)*|
|120,000||15,300 + 32% excess over 120,000 PLN|
*In the case of income up to PLN 120,000, the tax is 17% minus the amount reducing the tax PLN 5,100. As a result, the tax-free amount is income up to PLN 30,000, because if we calculate the tax at the rate of 17% from PLN 30,000, this amount will be PLN 5,100, i.e. the amount deducted from the tax (17% minus the amount reducing PLN 5,100).
The tax-free amount is set at PLN 30,000 and was introduced as of 1st January 2022. This means that taxpayers earning less than PLN 30,000 per year will be exempt from paying tax.
In the case of income exceeding PLN 120,000, the tax is PLN 15,300 + 32% of the excess over PLN 120,000. The decreasing tax amount is already included in the above sum of PLN 15,300.
Taxation of income from business activity
Individuals running business activities (as sole traders or as partners in partnerships) can, instead of being subject to the tax scale, opt for a flat 19% income tax rate, lump sum tax or so-called 'tax card'**, subject to certain conditions.
**Please note that the ‘tax card’ was liquidated as of 1st January 2022 as a method of tax settlement, but only taxpayers who settled in the form of a tax card in 2021 will still be able to use it, but if they resign from this option, they will not be able to return to the tax card in the following years.
Taxation of capital gains
Capital gains (including dividend and interest income) are taxed at a flat rate of 19%. The tax-free amount does not apply to this income.
Taxation of rental income
Currently, the taxpayers can choose the method of taxation of rental income, i.e. taxation with a tax scale or a lump sum tax on recorded revenues.
As of 2023, the rental income will be taxed only as a lump sum tax on recorded revenues (8.5% rate for revenues below PLN 100,000 per year and 12.5% on the surplus over PLN 100,000). This means that the total rental income will be taxed without the right to deduct costs of earning income (e.g. maintenance costs, utilities)
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 double tax treaty (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.