[Poland] Lower PIT rate – to whom will it apply?

The government adopted an act lowering the basic PIT rate from 18% to 17%, currently the project is waiting for approval by the Parliament. The lower tax will apply to earnings to the amount not exceeding PLN 85,528.

The reduction of the tax rate will benefit employees employed under an employment contract, contractors and persons conducting their own businesses, accounting for the tax on general principles. Pensioners will also benefit from the change.

17% tax will cover income up to the amount of 85 528 PLN, earnings above this level as before will be taxed at the 32% rate.

Initially, the entry into force of a lower PIT rate was planned for 1 January 2020. The latest announcements indicate a shortening of this deadline, but the project is still awaiting approval by the Members of Parliament.

Still in August 2019, if the act is signed by the President, the zero PIT rate for employees under 26 will come into force. Also in this case, it will apply only to salaries up to PLN 85,528. The surplus will be taxed at the rate of 32 per cent. The relief will be settled in the annual tax return for 2019, unless the young taxpayer makes a statement on using the PIT exemption.

Zero PIT rate will apply to earnings earned within a single contract. If the taxpayer works for more than one employer, he will choose the contract to which the tax exemption is to be applied. He will be obliged to provide other employers with a declaration of non-application of the exemption.

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