The tax system in Poland is based on three pillars:
- • the Constitution of the Republic of Poland,
- • internal tax regulations,
- • EU tax regulations regarding Art. 93 of the Treaty Establishing the European Community.
Both direct and indirect taxation exist in Poland.
The first group (DIRECT) includes the following types of tax:
- income (PIT and CIT),
- civil law transactions,
- other e.g. inheritance and endowment, real estate, agricultural, forestry, means of transport.
The second group (INDIRECT - where tax is included in the cost of goods or services) covers:
- VAT (Tax on Goods and Services),
- Excise tax.
Since joining the European Union on the 1st
of May 2004, Polish tax system must be compliant with EU regulations.
Income tax is covered by the Corporate Income Tax Act referred to as 'CIT' (for limited liability companies or joint-stock companies) and the Personal Income Tax Act referred to as ‘PIT‘ (for natural persons). The type of taxed entity will determine which act should be followed.
Value added tax
|incomes of capital companies and limited
joint stock company
15% for smaller taxpayers (i.e. taxpayers whose value of sales revenue - including the amount of VAT due - did not exceed in 2016, the amount corresponding to the equivalent of EUR 1.2 million, i.e. PLN 5,157,000 ) and for those starting a business
|- share in capital company profits, i.e. dividends (withholding tax)
- business activity (self-employed) - after the declaration of the linear taxation
|- business activity (self-employed) unless the
linear taxation is declared
- employment contracts
- civil law agreements
- activity performed personally (e.g. members of board of directors)
|18% up to 85,528.00 PLN
and 32% of the surplus over 85,528.00 PLN
Value Added Tax Act (VAT) is classed as either:
- • output tax - resulting from sale; the seller is obliged to produce an invoice and pay VAT to the tax office’s bank account,
- • input tax - paid by the buyer of goods or services to the seller. It can be deducted from the buyer’s own output tax or reclaimed from the taxman.
Since 2011 there is a standard VAT rate of 23% in Poland. However, some goods/ services are either exempt or a reduced VAT rate is applied.
|All besides below mentioned
|Following goods and services:
· certain agricultural related services,
· processed food such as sugar, soups, sauces,
· passenger transport,
· pharmaceuticals and medical equipment,
· construction and supply services for houses and apartments classified as social housing,
· all catering and restaurant services except for the supply of beverages,
· newspapers and magazines,
· communal services.
|Food produce such as dairy, meat, poultry and fish
|- Export of goods
- Intra-community delivery of goods
- International transport
|- Supply of goods used only for activity exempt from VAT
- Financial services
If a company’s annual turnover is less than 200,000 PLN there is no need for a VAT registration in Poland. However, if the turnover exceeds 200,000 PLN, the company must be registered with the local Polish tax office which will provide a registration number. If an entrepreneur intends to perform intra-community transactions, the head of the Tax Office must be notified of such intention prior to the first supply or acquisition of goods to or from another company in an EU member state. The notification is completed by submitting form VAT-R.
Tax on civil law transaction
With respect to business activity, tax on civil law transactions applies as set out below:
|- articles of incorporations of capital companies and partnerships
- increase of the capital or contribution in a partnership
- loan granted by a partner to a partnership
|- sales or donation of property (including immovable property)
|- sales of certain financial rights, including shares
|- loans granted by shareholder to capital company
- loan agreements
Tax on civil law transactions is due within 14 days from the transaction date.