Tax Guide Print E-mail

Poland's taxation of an individual's income is progressive. In other words, the higher the income, the higher the rate of tax payable. The 2006 tax rate for an individual is between 19% - 40%. Individuals can choose, under certain conditions, paying a flat rate of 19% on business income

The tax year in Poland is the calendar year ending on December 31.

Income tax: 19-40%

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 2006: 

Tax Base (PLN)

Tax %

0 - 37,024

19% minus PLN 530

37,025 - 74,048

PLN 6,504 plus 30% of the excess over PLN 37,024

74,049 and over

PLN 17,611 plus 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 19%

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 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 19%.

In Poland dividend income is taxed at 19% 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 – could change to a % of property market value shortly.

Corporation tax: 19%

VAT: 22%

In most cases, Value Added Tax is payable at a rate of 22%.

There are reduced rates of 7% and 3% for certain products and services. 7% VAT is levied on new-build properties

For a company, if the annual turnover is less than EUR 10,000, the owner of the business is exempt from VAT registration