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Tax Guide Poland, Polish property |
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Poland's taxation of an individual's income is progressive. That means, the higher the income, the higher the rate of tax applicabe. The tax rate for an individual is between 18% - 40%. Individuals have the choice of paying a flat rate of 18% on business income
The tax year in Poland is the calendar year ending on December 31.
Income tax: 18-40%
An individual pays tax on his income as a wage earner or as a self-employed person. The tax for an individual who meets the criteria of a "permanent resident" in Poland will be calculated on his income in Poland and abroad. A foreign resident, who is employed in Poland, pays tax only on his income earned in Poland.
To be considered a Polish resident, the permanent place of residence in Poland is the main criterion.
Poland Individual income tax rates:
Tax Base (PLN) |
Tax % |
0 - 37,024 |
18% minus PLN 556 |
37,025 - 74,048 |
30% of the excess over PLN 37,024 |
74,049 and over |
40% of excess over PLN 74,048 |
Comment: There is an initial allowance of PLN 530 on the lowest income bracket.
Capital Gains tax: at 18%
In general, there is no special tax rate for capital gains in Poland. Capital gains are usually added to the regular income of an individual/company and based on the normal tax rates.
Despite this, if property in Poland (or real estate) is sold more than 5 years after it was purchased the capital gain is exempt from tax.
Individual's capital gain from sale of shares is taxed at a final tax rate of 18%.
In Poland dividend income is taxed at 18% rate.
Inheritance tax:
Inheritance and gift tax are governed by the law dated 28 July 1983, modified by later amendments. Tax becomes payable upon the transfer by gift or inheritance of wealth situated in Poland.
If the transfer takes place in Poland, but neither the transferor nor the transferee is a Polish citizen or resident of Poland, then the transfer is not taxable.
Local tax: property taxes: 1.5% of nominal property value – might change to a % of property market value shortly.
Corporation tax: 18%
VAT: 23%
In most cases, Value Added Tax is payable at a rate of 23%.
There are reduced rates of VAT for certain products and services. 8% VAT is levied on new-build properties
For a company, if the annual turnover is less than certain limits, the owner of the business is exempt from VAT registration
