Polski Ład (Polish Deal)

Increasing the „tax-free amount.”

The monthly tax relief changes from PLN 43.76 to PLN 425.
PLN 30 000.00 (annual tax-free amount) x 17% = PLN 5 100.00
PLN 5 100.00/12 = PLN 425.00

The application the monthly tax relief (PLN 425), will also be possible after exceeding the 2nd tax threshold, i.e. an income amount of PLN 120 000.00.

Increasing the tax threshold.

The new tax scale from 2022 introduces an increase of the 1st tax threshold to an income amount of PLN 120 000.00 (previously PLN 85 528.00), beyond which the 32% tax rate applies.

No possibility to deduct the health contribution from the advance payment of income tax (previously a reduced advance payment of 7.75%).

This results in that the health contribution will be taken entirely (9%) from the taxpayer's salary.

Possibility to resign from the application of employee deductible costs (koszty uzyskania przychodu - KUP).

If an employee is employed by more than one employer, each employer charges the employee with KUP. This results in an excess of the amount of KUP that can be included in the annual tax settlement, leading to a tax surcharge. From 1 January 2022, an employee can submit a declaration for not charging KUP.

The possibility of discontinuing advance tax collection for taxpayers receiving income referred to in Art. 35(1), (5), (6), and (8), Art. 41 sec.1 of the PIT Act, i.e.: from contracts of mandate, graduate internship, or student placements.

• In order to benefit from this right, the taxpayer must submit an application while meeting the conditions:
• annual income cannot exceed the quotient of the tax-decreasing amount and the lowest tax rate specified in the first tax threshold (i.e. the amount of PLN 30 000),
• does not receive any income other than that received from that payer, for which advance tax payments are calculated taking into account the reduction referred to in Art.32 sec.3, or are paid pursuant to Art.44 sec.3.

   

Deductibility of membership fees paid to trade unions from income.

Membership fees paid in the tax year to a trade union, not exceeding the amount of PLN 300 in the tax year, will be deductible in the annual tax settlement. The amount of expenses, in the case of contributions deducted by an employer, will be deductible on the basis of a statement from a trade union organisation.

Relief for the „middle class”

This relief is available to employees whose income falls between PLN 68 412 and PLN 133 692 per year, respectively from PLN 5 701 to PLN 11 141 per month.

The relief will be calculated monthly according to an algorithm, where A is the amount of income earned during the month from the employment relationship:

• for persons with incomes between PLN 5 701 and PLN 8 549:
  (A x 6.68% – 380.50) / 0.17;
• for persons with incomes between PLN 8 549.01 and PLN 11 141:
  (A x (-7.35%) + 819.08) / 0.17.

The indicated algorithms will be applied to each salary payment on a monthly basis, which may result in a tax adjustment or even the loss of the right to relief.

If a taxpayer in the tax year does not achieve income in the amount of PLN 68 412 or exceeds the amount of PLN 133 692, that person will lose the right to the relief, which was applied by the employer, as a result of which that person will have to make a tax surcharge to the Tax Office in the annual tax settlement. If the amount of PLN 133 692 is not exceeded for a given year, the employee will recover the overpaid tax in the annual tax settlement.

In order to reign from the middle class relief, a written request must be submitted to the employer, in accordance with the template attached to this information.

Relief for seniors

This relief is available for women over 60 and men over 65 years of age, employed on an employment contract as well as those working on a contract of mandate, who, despite having reached pension entitlement, have opted out and are still economically active. Working seniors who do not collect a pension will only pay tax once their income exceeds PLN 85 528. In order for the relief to be applied when calculating remuneration, an appropriate declaration of entitlement to the relief must be submitted. Otherwise, it can be settled by the employee, contractor in the annual tax settlement.

Relief for families 4+

This is a relief aimed at parents who are raising four or more children. It will be applied by the employer under the condition of submitting an application for relief for each parent and legal guardian. Otherwise, it can be settled by the employee, contractor in the annual tax settlement. The exemption will cover the amount of income of up to PLN 85 528 earned annually from employment and contract of mandate.

Relief for return

The relief is applicable on the basis of a written application submitted to the employer for persons who have changed their tax residence to Poland and have resided for a minimum of three years in a European Union Member State or in a state belonging to the European Economic Area, the Swiss Confederation, Australia, the Republic of Chile, the State of Israel, Japan, Canada, the United Mexican States, New Zealand, the Republic of Korea, the United Kingdom of Great Britain and Northern Ireland, or the United States of America, or have lived in the Republic of Poland for a continuous period of at least five calendar years preceding the period of three years referred to above and have a certificate of residence or other proof documenting their place of residence for tax purposes for a period necessary to establish the right to this exemption. For four years after their return to Poland, these persons will pay lower income tax as long as they receive income from an employment contract, contract of mandate, copyright and related rights. The relief for return can also be applied to an amount of income not exceeding PLN 85 528.

Polish Deal supplementary information

Request not to extend deadlines for collecting advance tax payments

https://www.podatki.gov.pl/polski-lad