Taxes in Poland
It is a good idea to open a business in Poland. The Republic of Poland as you know, Poland is one of the most promising countries for doing business. A stable economy and moderate tax rates make it possible not only to start a business but also to make it profitable. That is why many foreign citizens choose this country to start their own business in 2020.
There are many reasons why Poland is good for business. One of them is taxes. Poland has a low VAT rate – only about 23%. The government can offer a profitable business income tax and other tax incentives.
Taxes in Poland are balanced to ensure a combination of high living standards and social responsibility. The tax policy of the state is very effective in covering the main items of expenses, as well as the ability to provide favorable conditions for the development of entrepreneurship and attracting foreign capital to the country.
What are the taxes
Poland has become one of the most attractive places for investment, where, according to calculations, the return on invested foreign capital could be three times higher than in other countries of the European Union. For several years Poland has been demonstrating its leading economic position in Central and Eastern Europe. Moreover, Poland has become the undisputed “number one” investment destination, like stability, consistency, and an open-door policy for foreign capital attract investors to do business in Poland. Well, the fact that the corporate income tax has been reduced from 15% to 9% this year speaks for itself.
System of taxes and fees
Poland has a progressive taxation system. As a general rule, companies and individuals who are not residents of Poland, are taxed in the same way as residents of Poland.
Corporate income tax
Companies in Poland pay corporate income tax (CIT) at a flat rate of 19% on their business income, while individuals can opt for a flat-rate tax of 19% on most of their business income.
Withholding tax
The withholding tax is 19% in Poland. In some cases, this rate can be lowered. The specialists of our company have been dealing with taxes in Poland for many years and will advise you on these issues.
Personal income tax
Since 01.01.2004, the income tax rate has been lowered and today it is 19%. Companies registered outside of Poland have a so-called “limited tax status” and pay tax only on the profits that were received in Poland. There are a few types of activity that have exemptions from income tax: Income from agricultural activity; income from forestry according to the Law on Forests; payments received as compensation and for charitable purposes (including education, health care, sports culture, etc.); as well as income subject to regulation by international agreements.
Request bookkeeping solution
If you have a company in Poland, it is mandatory to do accounting and complete all taxation rules according to state laws. You can learn more about Accountancy in Poland below. Besides, our company also offers an accountancy service in Poland.
Tax system
| Tax | Applies to |
|---|---|
| 23% | the basic VAT rate. Today, the Polish legislator is considering the issue of changing this rate and, possibly, starting next year, VAT in Poland will be reduced to 22%. |
| 8% | applies to pharmaceutical and medical products, passenger transportation services, temporary accommodation and accommodation services, housing construction, etc. |
| 5% | applies to such groups of goods as bread, meat, dairy products, books, and periodicals. In turn, there is also a zero VAT rate, which is applied when purchasing and supplying goods from EU countries to Poland. |
To obtain the status of a VAT payer, you must apply to the tax office with a corresponding application. This application is free of charge. There is a similar procedure for obtaining the right to be a VAT payer within the EU (VAT UE).
Every month, by the 25th, the taxpayer must submit a VAT return. Payment of tax for the current month occurs before the 25th day of the next month.
Polish law does not provide for an obligation for companies to register as VAT payers if your annual sales do not exceed 150,000.00 zl. (34,000 euros). However, to have such a status is rather a requirement of modern realities, since otherwise most of the counterparties simply will not do business with you.
Direct tax
Corporate income tax (corporate income tax), personal income tax, council tax levied by the government on behalf of the communes, property tax, a land tax levied by municipalities independently.
Indirect tax
VAT, excise taxes on fuel, tobacco, alcohol.
Fees
Annual registration tax, registration and stamp duties, import duties.
The individual income tax rate in Poland
Down below you can see a table with data from 2020 about the income tax rate.
| From | To | % |
|---|---|---|
| €0 | €85,528 | 17%* of the base less the amount decreasing tax |
| €85,528 | + | 32% |
Business in Poland
Our company provides services for setting up a company in the Republic of Poland. The specialists of our company have the necessary knowledge, experience, and qualifications. We can offer a consultation with taxes in Poland. Besides, we also provide business support, accounting, and other services necessary for your business. Our specialists have vast experience in this field of activity. We will be happy to help you successfully open a business in Poland.
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