Last update: 10 March, 2017

Personal Income Tax – PIT

PERSONAL INCOME TAX (PIT)

The PIT tax return form is filed in the place of residence as of the end of December of the preceding year.

Every individual who obtains income must pay Personal Income Tax.

How is it caltulated

.The principles of calculation for each tax rate band are different:

    • If the taxable income equals PLN 85,528 or less (i.e. if the person has earned up to PLN 85,528 in the year), then the tax equals 18% of this base minus PLN 556.02.

    • If the taxable income exceeds PLN 85,528, then the tax equals PLN 14,839 + 32% of the amount in excess of PLN 85,528.

Many software programmes facilitating the calculation of taxes can be found on the Internet. They can be used, but if anything seems unclear, it is best to contact the tax office, which will answer all questions and clarify all doubts.

Tax settlement document

Taxpayers must file their tax returns using special documents called PIT. PIT forms are available at all tax offices.

Before filling in a PIT form, you should make sure which of the various PIT documents is applicable for your situation. In order to do so, it is recommended to contact the tax office.

The completed and signed PIT form should be filed at the relevant local tax office for the taxpayer’s place of residence.

It is also possible to send a settlement electronically using the e-Deklaracje system.

How to pay income tax

When taking up a job, one can authorise the employer to pay the so-called advance income tax payments. To do so, one has to file the PIT- 2 form.

In such cases, the advance income tax payments are deducted from the remuneration paid to the employee. Then, by the end of February of each year, the employer sends a PIT-11 form to the employee. This form constitutes the basis for settlement with the tax office on a separate PIT form.

Note: losing the PIT-11 form, failure to collect it from the post office, in other words not having the form does not exempt the employee from paying the tax. Taxpayers who do not receive the PIT-11 from their employers (principals) by the end of February should contact them as soon as possible and ask them to provide the document or a copy. Taxpayers who do not receive the form can use the data contained in ZUS-RMUA documents.

Individuals who conduct their own business activity have to pay tax on their own on a monthly or quarterly basis.

Deadline

By 30 April every year every taxpayer (individual paying tax) must file a PIT tax return form in the tax office.

This is also the deadline for making the tax payment (if it has been calculated for payment in the PIT form). The tax can be paid by cash at the tax office or by bank transfer.

In tax offices there are information desks offering advice related to tax settlement.

If the PIT form shows an excess payment of tax, the tax office must refund it to the taxpayer within 3 months. However, sometimes this period is prolonged.

Joint taxation with spouse or children

Joint taxation with a spouse or with a child is possible for individuals who do not conduct business activity (joint taxation may be applied only if neither of the spouses conducts business activity). Individuals who conduct business activity pay a flat tax at the rate of 19%.

In order to settle tax jointly with a spouse, the following conditions have to be fulfilled:

  • both spouses must reside in Poland for at least 183 days in the given year;

  • they must have a common marital estate;

  • they must be married for the entire year for which the PIT form is filed;

  • they must file a statement on the fulfilment of the conditions listed above – by placing their signatures on the PIT form.

Spouses must calculate their income separately and deduct applicable tax concessions separately from their respective incomes. Then they should add the incomes calculated in this manner, divide the joint income by two and calculate the tax for each of the spouses (it will be the same for each of them). Then the spouses have to add their taxes and deduct all tax deductions (information about tax deductions can be found below). If the tax calculated in such a way is lower than the total advance payments that have already been paid, the couple is entitled to a refund from the tax office.

In order to settle tax jointly with a child, the following conditions have to be fulfilled:

  • one has to be single (unmarried, widow(er), divorced);

  • and have custody of a child (as parent or legal guardian.

Joint taxation applies to children:

  • under 18 years of age;

  • under 25 years of age if they are still studying (provided that the child has not obtained any income or has obtained income exempt from tax in the given year).

In order to calculate the tax, the parent should calculate their income, deduct applicable deductions, calculate the tax for half of the income and then multiply it by 2. Then they should deduct the applicable deductions from this amount.

As a result, the calculated tax (joint taxation with child) will be lower than that calculated only for one person.

Tax allowances

While calculating the tax, it is possible to deduct tax allowances – this offers the taxpayer the possibility to pay lower tax.

Allowances may be deducted from income and from tax.

  • Allowances deducted from income: income is revenue (everything that we earn) decreased by deductible expenses; e.g. social security premiums may be deducted from income;

  • Allowances deducted from tax: e.g. child benefit, health insurance premium, Internet allowance.

In order to deduct the allowances, one should fill in the relevant PIT forms. Detailed information can be found at the tax office. The tax office also provides information about allowances that may be deducted in order to lower the amount of tax to be paid.

  • 1% tax for public benefit organisations

Every taxpayer has the right to transfer 1% of their tax to a public benefit organisation. In such a case the taxpayer does not transfer the whole tax to the state budget, but may choose to support a social organisations, such as a foundation or association. Such organisations may be charitable, they may promote education, social work, defence of human rights, or other types of assistance, e.g. legal or social. Thus, the taxpayer can have a direct influence on the causes supported by part of their tax.

In order to transfer 1% of tax, one should enter the register number of the organisation (KRS number) and the amount to be transferred (which cannot exceed 1% of tax) in the correct field of the tax return form.