Taxation in Poland


Taxes in Poland are levied by both the central and provincial 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)


In 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


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


In 2017, tax rates were changed. 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


In 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


In 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


In 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

Social security contributions in 2014


Furthermore, 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[6]

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 2020


The cap of salaries in 2020, for which rates below apply, is PLN 156,810.[7]

Insurance policyTotalEmployee % (of total gross salary) Employer % (of total gross salary)
Pensions and diability insurance27.52%11.26% 16.26%
Sickness insurance2.45%2.45% -
Accident insurance0.67%-3.33%- 1.67%(up to 9 employees), 0.67%-3.33% (more than 9 employees - rate depends on the business sector
Labour Fund2.45%- 2.45%
Employee Guaranteed Benefits Fund0.10%- 0.10%

See also


References


  1. "OECD- Taxation Poland" (PDF). OECD.
  2. "KPMG - Income Tax".
  3. "Poland VAT Guide - Avalara". www.avalara.com. Retrieved 2020-04-25.
  4. "VAT in Poland". www.tmf-group.com. Retrieved 2020-04-25.
  5. "KPMG - Poland: VAT essentials".
  6. "KPMG - Poland Taxes".
  7. "Poland - Individual - Other taxes". taxsummaries.pwc.com. Retrieved 2020-04-25.