Taxes

Taxation is probably the most important factor of your expatriate salary. It matters a lot where you will be officially taxed and how your company will evaluate your tax internally.

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Most common approach is Tax Equalization Scheme where an expat is treated as if (s)he still worked in her/his home country. Hence your net salary will remain stable, you will be hypothetically taxed and your company will pay your real tax in Poland. As a result if you come as an expat from Sweden or Germany, countries where income taxes for high-earners are higher than in Poland, you will not be disadvantaged. Your company takes the tax burden on themselves and pays the difference in tax from their own pocket. If you on the other hand you were based in a lower-taxed countries, you will not be better off working in Warsaw.

Usually at the end of each tax year, you will be asked to fill in a long questionnaire prepared by a tax company who will evaluate your tax return hypothetically in your home country. As a result the possible tax return amount will be paid by your employer. The same tax advisor will also prepare your official tax declaration in Poland. In this case however, all the monies that might be paid back by Polish tax authorities will belong to your company.

Problem occurs, when you have made some long-term investments in your home country giving you tax relieves there. Make sure you discuss your case with your HR department and get support from a tax advisor beforehand.

This approach might seem not fair for some, it is however widely spread and allows expats forget all the tax issues problems, for all the paper work is in an external tax advisor hands.

Polish Income Taxation System

Personal Income Tax (PIT) follows a progressive tax rule and is based on your income from work for another entity. Currently the income is calculated as:

  • 0% for the amount below 3091zł (~800EUR)
  • 18% from the amount below 85528zł (~22000EUR) decreased by  556,02zł or
  • 30% from the amount above 85528zł increased by 14839,02zł

Additionally other gains from other activities are taxed as follows:

  • 19% - sales of real estate
  • 20% - income gained from writing, sports, copy rights, journalism
  • 10% - lottery wins
  • 20% - gains from supporting or helping police investigations, custom clearance offices, intelligence and tax authorities
  • 19% - gains from capital interests and stock exchange gains

Basic Rules:

  • Social Security Payments lower your taxable income and health care insurance can be deducted from your tax.
  • Spouses can be taxed together hence lowering the due tax, especially when one spouse earns much less than the other
  • Due tax can be lowered by so called "cost of bringing up children" (1112,04zł per child per year)

Corporate Income Tax (CIT) is a tax for legal entities and equals 19%.


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