Tax laws Poland
Poland's taxation system is structured to fund various public services and infrastructure projects. Here's an overview of the key tax components:
Income Tax:
Personal Income Tax (PIT): Poland employs a progressive tax system with the following rates:
Up to PLN 120,000: 12% tax rate, with a monthly tax-reducing amount of PLN 300.
Above PLN 120,000: A base tax of PLN 10,800 plus 32% on income exceeding this threshold.
Solidarity Levy: An additional 4% tax on annual income exceeding PLN 1,000,000, allocated to the Solidarity Support Fund for Disabled Persons.
Corporate Income Tax (CIT): The standard CIT rate is 19%. However, a reduced rate of 9% applies to small businesses since January 1, 2019.
Value-Added Tax (VAT):
Standard Rate: 23% applied to most goods and services.
Reduced Rates: 5% and 8% rates apply to certain foodstuffs. Some services are either exempt or taxed at a 0% rate.
Social Security Contributions:
Employee Contributions:
Pension Insurance: 9.76%
Disability Insurance: 1.5%
Sickness Insurance: 2.45%
Health Insurance: 9%
Employer Contributions:
Pension Insurance: 9.76%
Disability Insurance: 6.5%
Accident Insurance: Rates vary based on the business sector.
Labor Fund: 2.45%
Employee Guaranteed Benefits Fund: 0.10%
These contributions are subject to an annual salary cap, which was PLN 208,050 in 2023.
Recent Developments:
Digital Services Tax: Poland is determined to proceed with a plan to tax big tech companies, despite threats of retaliation from the incoming U.S. Ambassador. This tax proposal has escalated tensions between Poland and the United States.
Investment Initiatives: Prime Minister Donald Tusk announced an expected investment of over 650 billion zlotys ($160 billion) in 2025 to stimulate economic growth. The government aims to boost investment across sectors like defense, green energy, IT, and transport infrastructure, with significant allocations for the rail network by 2032.
Fiscal Policy Recommendations: The OECD emphasized the need for Poland to cut spending and raise taxes to address the growing budget deficit. Recommendations include shifting property tax bases, increasing fuel duties, restricting preferential VAT rates, and cutting benefits for higher-income families to boost revenues.
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