Taxation

The Polish tax system consists of several types of taxes. It is important to remember to make timely payments and file tax declarations, as the law provides for penalties for tax evasion. The main taxes that researchers should be aware of are as follows:

In general terms, anyone who works and is present in Poland for at least 183 days of the calendar year (in aggregate) or has the centre of his or her vital interests here is a taxpayer in Poland. Such persons are taxable on their worldwide income, regardless of the place from which the remuneration is received (unlimited tax liability). In case of temporary residence, only income from Polish sources, regardless of where it is received, is subject to taxation in Poland (limited tax liability).

Detailed information on the Ministry of Finance website

The detailed rules are set out in the double taxation treaties that Poland has signed with over 90 countries. They apply to income from the territory of one country that may be taxable in another. The agreements protect you from paying income tax in both countries. They provide two main methods of calculating the tax: (1) the exemption method (exemption with progression) and (2) the credit method. Please familiarise yourself with the correct treaty to choose the appropriate method.

The list of agreements: Polish version and English version 

Depending on the type of employment contract, your income in Poland is subject to one of the below taxation rates. Employers   are obliged to make advancement of monthly tax payments (personal income tax) to the fiscal authorities, regardless of the employee's type of work contract or fellowship agreement (if taxed).

1. In the case of a regular employment contract, the taxpayer pays tax on the actual income earned according to the progressive tax scale, based on the following income thresholds:

• up to PLN 30,000 per year - no tax is payable
• up to PLN 120,000 per year - 12% tax
• over PLN 120,000 per year - 32% tax
• amount reducing the tax is PLN 3 600

1. In case of a civil law contracts (see: Employment conditions section), a flat rate of 19% tax is paid. 

However, for the annual tax return, when all incomes are added up, the progressive scale (12% or 32%) is used.

Note:

• income earned by persons up to the age of 26is not taxed.
• parents filling in their annual tax declarations (PIT) are entitled to certain tax returns, depending on the number of children raised (see Pregnancy & Family section).

In addition to taxes, social security and healthcare contributions are deducted from the earned income. That is why, your monthly salary paid to you (net amount) is relatively lower than the gross salary stated in your work contract.

More on Social security & Heath insurance and care

Each year between February and April 30th, all employees who worked in Poland in the previous year, have to submit their annual PIT declaration to the fiscal authorities. If 30th April falls on a Saturday or a holiday, the first working day following the holiday(s) is considered the deadline. The calendar year is the settlement period for individual taxation. There are various PIT declarations marked with different numbers but the most common one is PIT-37 for employees not running their own business.

In order to file your tax declaration, you should collect a PIT-11 from all your employer(s), which contains information about your remuneration and any taxes paid. Employers must provide this form to their employees by the end of February each year. PIT forms can be submitted online and the systems are available in both Polish and English. They can also be filled in on paper and sent by post or delivered directly to the tax office.

VAT is the most common indirect tax, with a standard rate of 23% for most goods and services, and reduced rates of 8% (e.g. healthcare products, admissions to cultural, sporting and recreational events and hotels), 5% (e.g. some basic foodstuffs and books) or 0% (e.g. intra-Community supplies of goods and their export).

Information for companies on the Ministry of Finance website: https://www.podatki.gov.pl/en/value-added-tax

VAT payers are often exempt from TCLC, although there are numerous situations in which this tax must be paid. So if you are thinking about buying a car, an apartment, taking out a loan, etc., remember about the tax on civil transactions. The tax rate is around 2% depending on the type of transaction.

Information on some transactions on the Ministry of Finance website

If you are planning to set up a foundation, a research institute, an association, etc., you should know that these types of organisations are defined as legal persons under Polish law. Therefore, they are subject to the Corporate Income Tax Act, which imposes a tax on them. However, if their statutory purpose is scientific or scientific and technical activity, they are exempt from the tax.

More information on the Ministry of Finance website: https://www.podatki.gov.pl/en/corporate-income-tax