Personal Income Tax (PIT)Print

The PIT tax return form is filed in the place of residence as of the end of December of the preceding year.

Personal Income Tax must be paid by every individual who obtains income, e.g. receives remuneration (under employment contracts or civil law agreements  – further information on various agreements is available here ->) or obtains income from economic activity.

Manner of calculation

One of the ways to calculate tax is to apply the so-called tax rate bands. In Poland there are two: If a taxpayer earns less than PLN 85,528 during the fiscal year, they are in the first tax band, and if more than PLN 85,528 they are in the second band. Tax rate bands apply primarily to individuals who perform work in Poland, receiving remuneration in return.

For individuals who conduct economic activity the so-called flat tax is applied, which is always the equivalent of 19% of the obtained income.

The principles of calculation for each tax rate band are different:

    • If the taxable income equals PLN 85,528 or less (i.e. if the person has earned up to PLN 85,528 in the year), then the tax equals 18% of this base minus PLN 556.02.
    • If the taxable income exceeds PLN 85,528, then the tax equals PLN 14,839 + 32% of the amount in excess of PLN 85,528.

Note: Individuals who have earned very low income will receive a tax refund. In the year 2012 the so-called tax allowance equalled PLN 3091. This means that individuals who earn less than PLN 3091 in a given year will receive a refund of the advance income tax payments that were paid. In such cases it is also required to file a tax return form (information about tax return forms can be found in the subsequent tabs).

Many software programmes facilitating the calculation of taxes can be found on the Internet. They can be used, but if anything seems unclear, one should contact the tax office, which will answer all questions and clarify all doubts.

Tax settlement document

Taxpayers must file their tax returns using special documents (forms) called PIT. PIT forms are available at all tax offices.

Note: In Poland there are numerous PIT forms – the selection of the correct form for settlement depends on many factors. The earned income (losses sustained) statement for a fiscal year can be filed using PIT 36, 36-L, 37, 38 and 39. Before filling in a PIT form, one should make sure which of the various PIT documents is applicable for the specific situation. In order to do so, it is recommended to contact the tax office.

The completed and signed PIT form (filing an unsigned PIT form is considered a failure to file a tax return form!) should be filed at the competent local tax office for the taxpayer's place of residence. The addresses of tax offices in Poland are available here ->

In Poland it is also possible to perform settlement electronically using the e-Deklaracje system. In order to do so, it is necessary to install the relevant software on the computer. The software is available here ->

How to pay income tax

When taking up a job, one can authorise the employer to pay the so-called advance income tax payments. To do so, one has to file the PIT- 2 form. This form is available here ->

In such cases, the advance income tax payments are deducted from the remuneration paid to the employee (e.g. monthly for employment contracts) – what is gross and net remuneration? ->. Then, the employer sends a PIT-11 form to the employee by the end of February of each year, containing information about income, tax-deductible expenses, paid advance income tax payments, and advance social and health insurance payments. This form constitutes the basis for settlement with the tax office on a separate PIT form.

Note: losing the PIT-11 form, failure to collect it from the post office, in other words not having the form does not exempt the employee from paying the tax. Taxpayers who do not receive the PIT-11 from their employers (principals) by the end of February should contact them as soon as possible and ask them to provide the document or a copy. Taxpayers who do not receive the form can use the data contained in ZUS-RMUA documents – further information is available here ->

If advance income tax payments are made, it may turn out that the tax shown in the PIT form has already been paid (thus it is not necessary to make a single payment of the aggregate tax amount). However, it may be necessary to make up the difference if the advance payments have not covered the whole tax due (this is the obligation of the taxpayer). On the other hand, it may also turn out that the tax office is obliged to refund any excess payments to the taxpayer.

Individuals who conduct their own business activity have to pay tax on their own on a monthly or quarterly basis (small enterprises and individuals who start business activity pay quarterly).

Deadline for settlement

By 30 April every year every taxpayer (individual paying tax) must file a PIT tax return form in the tax office.

This is also the deadline for making the tax payment (if it has been calculated for payment in the PIT form).

Note: This is a firm deadline!

The tax may be paid at the cash desk of the tax office where the PIT form is filed or by bank transfer to the bank account of the tax office. In order to receive information about the bank account number, one should contact the tax office directly; such information is also often available on the website of a given office.

Note: In tax offices there are information desks offering advice related to tax settlement. In the week before 30 April the opening hours of tax offices are often extended, and the last Saturday before the deadline is a working day, which means that the tax office is open and accepts PIT forms and payments of tax due. For detailed information, contact the competent local tax office for your registered place of residence.

If the PIT form shows an excess payment of tax, the tax office must refund it to the taxpayer within 3 months. However, sometimes this period is prolonged.

Joint taxation with spouse or children

In Poland joint taxation with one's spouse or children is possible.

Joint taxation with a spouse is cost-effective if the spouses fall into different tax rate bands, e.g. wife – 32% and husband – 18%. It is also worthwhile if one of the spouses does not receive income or if their income is lower than the amount exempt from tax.

Joint taxation with a spouse or with a child is possible for individuals who do not conduct business activity (joint taxation may be applied only if neither of the spouses conducts business activity). Individuals who conduct business activity pay a flat tax at the rate of 19%.

In order to settle tax jointly with a spouse, the following conditions have to be fulfilled:

  • both spouses must reside in Poland for at least 183 days in the given year;
  • they must have a common marital estate;
  • they must be married for the entire year for which the PIT form is filed;
  • they must file a statement on the fulfilment of the conditions listed above – by placing their signatures on the PIT form.

Spouses must calculate their income separately and deduct applicable tax concessions separately from their respective incomes. Then they should add the incomes calculated in this manner, divide the joint income by two and calculate the tax for each of the spouses (it will be the same for each of them). Then the spouses have to add their taxes and deduct all tax deductions (information about tax deductions can be found below). If the tax calculated in such a way is lower than the total advance payments that have already been paid, the couple is entitled to a refund from the tax office.

In order to settle tax jointly with a child, the following conditions have to be fulfilled:

  • one has to be single (unmarried, widow(er), divorced);
  • and have custody of a child (as parent or legal guardian.

Joint taxation applies to children:

  • under 18 years of age;
  • under 25 years of age if they are still studying (provided that the child has not obtained any income or has obtained income exempt from tax in the given year).

In order to calculate the tax, the parent should calculate their income, deduct applicable deductions, calculate the tax for half of the income and then multiply it by 2. Then they should deduct the applicable deductions from this amount.

As a result, the calculated tax (joint taxation with child) will be lower than that calculated only for one person.

Tax allowances

While calculating the tax, it is possible to deduct tax allowances – this offers the taxpayer the possibility to pay lower tax.

Allowances may be deducted from income and from tax.

  • Allowances deducted from income: income is revenue (everything that we earn) decreased by deductible expenses; e.g. social security premiums may be deducted from income;
  • Allowances deducted from tax: e.g. child benefit, health insurance premium, Internet allowance.

In order to deduct the allowances, one should fill in the relevant PIT forms. Detailed information can be found at the tax office. The tax office also provides information about allowances that may be deducted in order to lower the amount of tax to be paid.

  • 1% tax for public benefit organisations

Every taxpayer has the right to transfer 1% of their tax to a public benefit organisation. In such a case the taxpayer does not transfer the whole tax to the state budget, but may choose to support a social organisations, such as a foundation or association. Such organisations may be charitable, they may promote education, social work, defence of human rights, or other types of assistance, e.g. legal or social. Thus, the taxpayer can have a direct influence on the causes supported by part of their tax.

A list of public benefit organisations is available here ->

It is worth checking this list, because not all foundations or associations enjoy the status of public benefit organisation, which means that the 1% of tax may not be transferred to every foundation or association.

In order to transfer 1% of tax, one should enter the register number of the organisation (KRS number) and the amount to be transferred (which cannot exceed 1% of tax) in the correct field of the tax return form.

Facebook