Poland

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:

* In the case of income up to PLN 120,000, the tax is 12% minus the amount decreasing tax, which is PLN 3,600 (i.e. 12% of PLN 30,000, which is the tax-free amount of income).

The tax-free amount is set at PLN 30,000. 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 10,800 + 32% of the excess over PLN 120,000. The decreasing tax amount is already included in the above sum of PLN 10,800.

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 the so-called 'tax card'**, subject to certain conditions.

** Please note that the ‘tax card’ was liquidated as of 1 January 2022 as a method of tax settlement, and only taxpayers who settled in the form of a tax card in 2021 are still able to use it; however, 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 private rental income

As of 2023, the only acceptable form of taxation for private rental income is lump sum taxation (8.5% rate for revenues below PLN 100,000 per year and 12.5% on the surplus over PLN 100,000).

This means that total private rental income will be taxed without the right to deduct costs of earning income (e.g. maintenance costs, utilities). However, if the taxpayer settles the rental as part of a business activity, the taxpayer can still use the general rules, flat tax or lump sum rental settlement.

From 2023 spouses may benefit from a preference when settling private rental income by applying a higher 12.5% lump sum tax rate after exceeding the limit of PLN 200 000,00 (before 2023 year the limit was PLN 100 000,00 for the sum of income of both spouses), regardless of whether they settle this income separately or decide to tax it entirely by one of them.

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.

Solidarity tax

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.