E-book: Personal Income Tax


Personal income tax (PIT) is one of the most frequently collected public levies in Poland - only corporate income tax and value added tax are equally popular. The method of determining its amount and collection is regulated by the Personal Income Tax Act of July 26, 1991.

Personal income tax - who is the taxpayer?

The answer is simple - personal income tax is paid by entities without legal personality, i.e. natural persons. Article 3 of the Act indicates the group of taxable natural persons. These are those for whom the Republic of Poland is a place of residence, regardless of what is the source of their income and whether the activities generating them income are performed in Poland or abroad. The definition of the place of residence is important in this context. The easiest way to define it is a territory where all human activities are concentrated, or a place where he spends more than 183 days during a tax year.

All persons who work under an employment contract, civil law contracts, or who run their own sole proprietorship or civil law partnerships are subject to personal income tax, provided that their place of residence is in Poland.

Personal income tax - how to calculate?

The amount of personal income tax depends on the income earned by the taxpayer. By income we mean the income minus the costs incurred by the taxpayer in order to obtain it.

Income tax rates are not the same for everyone and depend on the form of settlement chosen by the taxpayer.

According to the general rules, a natural person is exempt from income tax if the annual income does not exceed the tax-free amount applicable in a given year. Anything that exceeds this amount and is lower than PLN 85,528 should be taxed at 18% of the tax. Higher amounts are already subject to the 32% tax rate.

If the taxpayer has chosen a flat tax, regardless of the tax base, he will pay tax in the amount of 19% of income. In the case of taxation using a registered lump sum, the rate depends on the type of business and may be 3%, 5.5%, 8.5%, 17% or 20%.

Personal income tax - taxpayer's obligations

The most important duty of the taxpayer is withholding income tax advances, depending on the method of taxation, monthly or quarterly. During the year, he does not have to submit any declarations, and at the end of the tax year, he should submit to the office an annual declaration summarizing the entire period. On its basis, possible underpayments or overpayments are settled.

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