Taxes in Poland are levied by both the central and local governments. Tax revenue in Poland is 33.9% of the country's GDP in 2017.[1] The most important revenue sources include the income tax, Social Security, corporate tax and the value added tax, which are all applied on the national level.
Income earned is generally subject to a progressive income tax, which applies to all who are in the workforce. For the year 2014, two different tax rates on income apply[2]
Value added tax (VAT)
editIn 1993, Poland implemented its Value Added Tax system.[3] Polish VAT is overseen by VAT acts and the Fiscal Penal Code, and is enforced by the Ministry of Finance.[4]
Value-Added Tax applies to most trade in goods in Poland. 23% is the basic rate.[5] Lower rates of 8% and 5% also apply for foodstuffs.[5] Furthermore, some services are taxed at 0% tax rate or exempted from value-added tax (eg. financial and postal services).[4]
Income tax scale before 2017
edit| Annual income | Tax rate |
|---|---|
| 3091-85,528 PLN | 18% of the income - 556,02 PLN |
| over 85,528 PLN | 14,839.02 PLN + 32% of the surplus over 85,528 PLN |
Income tax scale in 2017
editIn 2017, tax rates were changed. [1] Now, the tax is calculated using two tables. The first table does determine the amount of tax.
| Annual income | Income tax |
|---|---|
| 0 PLN - 85,528 PLN | 18% of income minus tax-reducing amount |
| over 85,528 PLN | 15,395.04 PLN + 32% of the surplus over 85,528 PLN minus tax-reducing amount |
The second table is used to determine the tax-reducing amount from the tax.
| Annual income | Tax-reducing amount(amount to subtract from the tax) |
|---|---|
| 0 PLN - 6,600 PLN | 1,188 PLN |
| 6,600 PLN - 11,000 PLN | PLN |
| 11,000 PLN - 85,528 PLN | 556.02 PLN |
| 85,528 PLN - 127,000 PLN | PLN |
| over 127,000 PLN | 0 PLN |
Income tax scale in 2018
editIn 2018, the tax scale was again changed. Income tax was calculated as follows:
| Annual income | Income tax |
|---|---|
| 0 PLN - 85,528 PLN | 18% of income minus tax-reducing amount |
| over 85,528 PLN | 15,395.04 PLN + 32% of the surplus over 85,528 PLN minus tax-reducing amount |
The second table is used to determine the tax-reducing amount from the tax.
| Annual income | Tax-reducing amount (amount to subtract from the tax) |
|---|---|
| 0 PLN - 8,000 PLN | 1,440 PLN |
| 8,000 PLN - 13,000 PLN | PLN |
| 13,000 PLN - 85,528 PLN | 556.02 PLN |
| 85,528 PLN - 127,000 PLN | PLN |
| over 127,000 PLN | 0 PLN |
Income tax scale in 2019
editIn 2019, the tax scale was again changed. Income tax in 2019 is calculated as follows:[1]
| Annual income | Income tax |
|---|---|
| 0 PLN - 85,528 PLN | 17.75% of income minus tax-reducing amount |
| over 85,528 PLN | 15,181.22 PLN + 32% of the surplus over 85,528 PLN minus tax-reducing amount |
The second table is used to determine the tax-reducing amount from the tax.
| Annual income | Tax-reducing amount (amount to subtract from the tax) |
|---|---|
| 0 PLN - 8,000 PLN | 1,420 PLN |
| 8,000 PLN - 13,000 PLN | PLN |
| 13,000 PLN - 85,528 PLN | 548.30 PLN |
| 85,528 PLN - 127,000 PLN | PLN |
| over 127,000 PLN | 0 PLN |
Income tax scale in 2020
editIn 2020, the tax scale was changed again. Income tax in 2020 is calculated as follows:[1]
| Annual income | Income tax |
|---|---|
| 0 PLN - 85,528 PLN | 17% of income minus tax-reducing amount |
| over 85,528 PLN | 14,539.76 PLN + 32% of the surplus over 85,528 PLN |
The second table is used to determine the tax-reducing amount from the tax in 2020.
| Annual income | Tax-reducing amount (amount to subtract from the tax) |
|---|---|
| 0 PLN - 8,000 PLN | 1,360 PLN |
| 8,000 PLN - 13,000 PLN | PLN |
| 13,000 PLN - 85,528 PLN | 525.12 PLN |
| 85,528 PLN - 127,000 PLN | PLN |
| over 127,000 PLN | 0 PLN |
Income tax scale in 2022
editin 2022, there were significant changes in the tax-free amount and in taxes.
The tax-free amount has been increased to 30,000 PLN year (6,600 Euro per year), for every income and is deducted from salary every month
| Annual Income | Income Tax |
|---|---|
| 0 PLN - 120,000 PLN | 12% minus tax reducing amount (3,600 PLN, 300 PLN every month) |
| over 120,000 PLN | 3,600 PLN + 32% of the surplus over 120,000 PLN |
There is also a non-deducted health care rate for each income of 9% and a reduction for the flat tax (for the self-employed) of 4.9%. This makes everyone pay the fee even if their income is in the free amount.[6]
Income tax scale in 2023
editIn 2023 tax-free amount remains at level of 30,000 PLN year for every income and is deducted from salary every month [7]
| Annual Income | Income Tax |
|---|---|
| 0 PLN - 120,000 PLN | 12% minus tax reducing amount (3,600 PLN, 300 PLN every month) |
| over 120,000 PLN | 10.800 PLN + 32% of the surplus over 120,000 PLN |
Social security contributions in 2014
editFurthermore, a range of social security contributions apply to all in the workforce, and are shared by the employee and the employer. These insurance contributions are paid by both private and public employees until a given ceiling. For the year 2014, the rates in the following table apply[8]
| Insurance policy | Total | Employee % | Employer % |
|---|---|---|---|
| Pension Fund | 19.52% | 9.76% | 9.76% |
| Disability Fund | 8.00% | 1.5% | 6.5% |
| Bridging Pension Fund | - | - | 0-1.5% |
| Illness Fund | 2.45% | 2.45% | - |
| Accident Fund | 0.67%-3.86% | - | 0.67%-3.86% |
| Employees Benefits Fund | 0.10% | - | 0.10% |
| Labor Fund | 2.45% | - | 2.45% |
| Total (up to limit) | 19.48%-24.17% | 13.71% | 19.48%-24.17% |
| Total (past limit) | 5.67%–8.86% | 2.45% | 3.22%–6.41% |
Overall worker tax rate and mandatory insurance amount to 53%.
Social security contributions in 2023
editThe cap of salaries in 2023, for which rates below apply, is PLN 208,050.[9]
| Insurance policy | Total | Employee % (of total gross salary) | Employer % (of total gross salary) |
|---|---|---|---|
| Pensions and disability insurance | 27.52% | 11.26% | 16.26% |
| Sickness insurance | 2.45% | 2.45% | - |
| Accident insurance | 0.67%-3.33% | - | 1.67%(up to 9 employees), 0.67%-3.33% (more than 9 employees - rate depends on the business sector |
| Labour Fund | 2.45% | - | 2.45% |
| Employee Guaranteed Benefits Fund | 0.10% | - | 0.10% |
See also
editReferences
edit- ^ a b c "OECD- Taxation Poland" (PDF). OECD.
- ^ "KPMG - Income Tax".
- ^ "Poland VAT Guide - Avalara". www.avalara.com. Retrieved 2020-04-25.
- ^ a b "VAT in Poland". www.tmf-group.com. Retrieved 2020-04-25.
- ^ a b "KPMG - Poland: VAT essentials".
- ^ "Sprawiedliwy system podatkowy - Polski Ład". www.podatki.gov.pl (in Polish). Retrieved 2022-01-11.
- ^ "Dudkowiak Kopeć Putyra - Tax Law in Poland". 14 December 2022.
- ^ "KPMG - Poland Taxes".
- ^ "Poland - Individual - Other taxes". taxsummaries.pwc.com. Retrieved 2020-04-25.
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