Taxes in Poland

Polish taxes can be divided into two groups: direct and indirect taxes. Direct taxes are assessed on personal revenue or property (personal income tax, corporate income tax, civil transactions tax). Indirect taxes are included in the price of goods and services (VAT or excise duty).

CIT

Poland corporate tax rate is 19%. Resident companies are subject to tax on their world-wide income. Non-resident companies pay CIT on income earned in Poland. A foreign company can establish a Polish branch which is allowed to run business exclusively within the scope of the activity of its foreign owner. Once a branch is established, the foreign company pays corporate income tax at the standard rate of 19% on the basis of income attributable to the operations of the Polish branch.

In general, the tax year for corporate taxpayers is the calendar year. Taxpayers are obliged to submit their tax declaration, together with the balance sheet, to the fiscal office within three months from the end of their tax year. Taxpayers are obliged to pay tax monthly in advance, based on the current year’s income.

PIT

Poland personal income tax is levied at progressive tax rates. There are two PIT rates: 18% and 32% An optional flat rate of 19% is also available.

Residents are subject to tax on their worldwide income. Non-residents are taxed only on their Polish-sourced income. Polish employers should deduct tax from their employees’ taxable salary and transfer it to the relevant tax office by the 20th of the month following the month when the tax advance payment was collected. Taxpayers are obliged to file an annual tax return by 30 April of the following year, stating all sources of income and showing any additional tax due.​

VAT

Polish VAT is levied on supplies of goods and services by taxable persons within territory of Poland. Since 1 January 2011 the standard VAT rate in Poland is 23%. Beside the standard rate there exist: 8%, 5%, 0% rates and exemptions. The rate of 5% and 8% applies e.g. to pharmaceutical products, passenger transport services. Zero-rated supplies include, among other things, exports of goods to countries outside the EU and international transport of goods (i.e. transport to or from non-EU countries). The liability to charge VAT falls on the person supplying the good and services. Business conducting activities that are subject to VAT are obliged to register as VAT taxpayer. Taxpayers whose net taxable sales did not exceed PLN 100 000 in the previous year are exempt from VAT and are not obliged to register for VAT purposes. When it comes to non-residents, the registration threshold does not apply and they must be registered for VAT purposes irrespective of the value of the transactions they carry out subject to VAT in Poland. Generally, the VAT reporting period is a month but taxpayers can also opt for a quarterly reporting period.

Excise duty

The excise duty applies to certain commodities such as: cars, tobacco, alcohol, fuels, energy. It is levied on different transactions which include: import of these products, intra-community transactions related to excise duty products, their production and sale on the territory of Poland.The excise duty tax rate varies and it is calculated as a percentage of the value of the goods or on a quantity basis.