Hello our regarded page reader, In this blog I’am gonna present you the most important topic followed after your business activities conducted in Poland. In the relation of taxation system in Poland, here we have 3 main and other little taxes here, which will be given information below all about properly. Our main focus in Company Registration and support, hereby we are going to answer frequently asked questions after Business Formation in Poland. Our aim is to make taxation matters clear for you which should facilitate you with making decision on Company Formation in Poland. As you might know Taxes in Poland are levied by both the central and the provincial governments and revenue of tax in Poland is 33.9 %. You will get introduce the following taxes, they are: income tax, corporate tax, value added tax and other taxes and incentives which are applied for the national level.
Corporate Income Tax (CIT)
Area of action :
Any legal entity, which is being in Poland for tax purposes is considered to be under subordination of corporate income tax CIT. What about foreigners whose aren’t Poland citizens?! The non-resident company CIT is subject only to income generated in Poland. Taxation of non-citizens may be even more limited if the non-resident’s local country has doubled Tax treaty with Poland.
So the legal entity is considered as a Polish resident if it has registered office (also virtual office is considered) or company’s management is situated in Poland.In this way, Polish subsidiaries of foreign companies are becoming residents of Poland for CIT purposes.
CIT accumulates 19% or 15% for flat taxpayers (eg taxpayers whose sales value) Income – including VAT, did not exceed the amount in the previous reporting year € 1.2 million, expressed in PLN) and for those wishing to start a business.
Administration of corporate income tax :
Companies are required to submit an annual ‘self-assessment’ fee within 3 months of the end of the tax year. The annual CIT obligation must be resolved within the same period. Typically, CIT is paid in monthly installments for the 20th day of each month of the previous month. Monthly Installment is calculated based on the financial data for the current year, which starts from the first month of the tax year. Small taxpayers, or companies whose total sales revenue, including value added tax on the previous product, The tax year was less than the € 1,200,000 you could pay in a quarterly installment. CIT quarterly payment method It can also be used by companies that are starting operations, but only in the first tax year. Then Periods had to pay them a monthly CIT if they were small payers. In addition, some are provided Conditions are met, taxpayers can apply a simplified method of CIT payment, is equal to 1/12 of the CIT In the previous year’s tax return. If CIT is not detected, taxpayers may pay monthly installments Two equal to 1/12 of the tax return caused by the tax return submitted in the current tax year. Penalties may be imposed for a period of 3 months due to non-compliance by the tax authority with CIT’s annual commitment After the end of the tax year and for the delay in filing the tax return. Penalties may also be imposed if the tax is impaired.
Filling out a form :
Most of the tax returns, tax information and tax returns (including CIT-8, IFT-2) have been submitted electronically. This means that each person who hires more than 5 employees is required to submit tax returns and tax information (including CIT-8, IFT-2) through electronic communication.
Electronically submitted documents must be marked with an electronic signature, a certified certificate
“Qualified Certificate”. The so-called In order to receive an “electronic signature”, it is necessary to submit an application One of the entities authorized to hand over the certificates and fulfill the official requirements that are necessary to prove the identity of the person who applies for the issuance of the signature.
What is tax base?!
The tax base generally includes all sources of income (with certain exemptions). There is no
special treatment for income such as interest or capital gains. Some of the most common are:
- Representation and entertainment costs
- Depreciated cars worth more than € 20,000 in this part exceed
- Tax penalties and budget interest
- Paid income taxes in Poland and abroad
- Expenses not incurred to generate or secure taxable income
- Unpaid interest
- Unrealized currency gains and losses.
The overall interest rate on dividends (WHT) is 19%. Taxes paid by Polish residents abroad
Subjects (non-residents) as intangible reserves (for example, consulting or management)
Subject to WHT interest at 20%. The same WHT rate applies to interest paid on non-residents and royalties.Under Polish CIT law, WHT rates can be avoided with dividends, royalties and interest rates if
Reimbursement is made to the parent or sister company.These WHT rates may also be reduced (relative to dividends) or avoided (in terms of intangible services).The specific provisions of the double tax treaties concluded by Poland and the respective countries in which Beneficiaries of payments are based on the completion of certain minimum administrative formalities. also,Dividends, royalties and interest paid by Polish residents in European countries will receive special Useful treatment based on the regulations implemented by various EU directives.
Personal Income Tax (PIT)
In general, Poland’s personal income tax system (“PIT”) is progressive and currently has two
Rates: 18% and 32%, more than personal allowance (variable).
- Income Tax (PLN)
85,528 up to 18%
- The variable amount released from the minus variable
85,528 above 14,839.02 – 32% of surplus products over 85,528
Individuals who operate in sole traders or partners can be taxed at 19% flat.
PIT tax rate provided that certain conditions are met. The same flat tax applies to interest and equity
Area of action :
Polish taxpayers are subject to PIT’s global revenue. As a person treated as a resident of Pitt, Poland,
Who has a personal or business interest center or spends more than 183 days a year in Poland. This is
It is enough to meet one of these conditions to become a tax resident of Poland. Double taxation issues are resolved Under the relevant double taxation agreement. Otherwise, if the contract is not used, double taxation can be avoided On the provisions of the Polish PIT. In general, income tax paid abroad can be proportionately transferred against Poland. PIT liability. Non-residents are subject to PIT only with income derived from a Polish source. A taxable base is calculated as the sum of income generated from all taxable sources, subject to a number Exceptions (i.e. some sources are taxed separately and remain beyond the total calculation of income). Income from a particular source is defined as an excess tax deduction from income derived from that source. Expenses related to the same source. If compared to a single source of income tax deduction costs, the result exceeds the income There is a tax loss.Taxpayers have the right to benefit from mitigation and deductions (eg child benefits, charitable contributions, Joint Married Tax Reconciliation).
Administration of personal income tax :
Employers have made commitments during the tax year. Tax advances should be calculated using
Appropriate tax rates (18% or 32%) and paid to the relevant tax office for the next 20 days of the following month. Reporting obligations also include the preparation of annual information (PIT-11 form, issued at the end of February After this fiscal year). Annual information should be included in the general rule Electronically. Taxpayers are required to file an annual fee before April 30 of the tax year and settle it. Annual PIT allocated during the same period. The annual PIT liability is calculated as the difference between the tax Announced in the annual PIT and the amount of installments collected during the year. Starting in 2015 The tax authorities prepare a declaration of pre-filling of taxpayers.
Both employers and employees are required to contribute to Poland’s social security system. .People
When paying for your share, the employer is obliged to refuse the employee’s social security share
Send them to the Social Security Administration (ZUS) every month. Retirement and disability
Insurance is limited to an annual head only (127,890 PLN in 2017).
Value Added Tax (VAT)
The value added tax (VAT) system in Poland is essentially the same as in the rest of the European Union.VAT is levied on most goods and services. Entrepreneurs who carry out VAT-related activities should Sign up as a VAT payer. In general, the length of the VAT reporting period is a month, but some small taxpayers can Select a quarter for the reporting period. Most taxpayers are required to prepare and submit SAF-T files Without the request of the tax authorities. A business that conducts internal public operations or transactions Sensitive goods are also required to submit an additional VAT return on such a transaction.
As a rule, VAT is, in fact, a tax on consumer spending, therefore, the final VAT burden should not be levied. Business activities. This is achieved through the VAT calculation mechanism, which, under certain conditions, Entrepreneurs registered as VAT payers are allowed to be reimbursed for VAT checks (included in the price) Goods or services).
Polish VAT produces the following activities:
- Delivery of goods and services to the territory of Poland
- Export of goods outside the territory of the European Union
- Import of goods from non-EU countries
- Domestic purchase of goods (ie import of goods from EU member states)
- Domestic public supply of goods (ie export of goods to EU member states);
From January 1, 2011, VAT rates are 23% (standard rate), 8%, 5%, 0% and exemptions.
Other little Taxes In Poland
Tax on real estate (RET)
real estate tax rates (“RET”) in Poland are defined by the taxes and fees set by municipalities under the “Local Law”. In 2017, the land plot used for business purposes is subject to a RET rate of 0.89 PLN (approximately 0.2 Euros) per square meter, while for buildings used for business purposes, RET is subject to a rate limit of 22.66 (approximately 5 Euros) per square meter. In addition, certain structures and constructions used for business purposes are subject to RET, generally 2% of their value.
Special economic zones tax relief
Polish law provides for investment incentives related to activities in 14 zones
Special Economic Zones (“SEZ”). To benefit from certain incentives, obtain permission from the Ministry Economics is needed. SEZ offers CIT exemption up to 50% of investment costs, i.e. subject Up to 50% of investment costs are exempt from CIT.
In addition to the CIT release, SEZ offers the following benefits for investors:
- Availability of a land with all necessary infrastructure
- Availability of a “built to suit” real estate fur lease or purchase
- Availability of grants
- Administrative support from the SEZ administrator
Retail sale tax relief
Retail sales are taxed on income from retail sales (sales of e-commerce are not subject to this tax). The retail tax should be levied at an income of more than GEL 17 million (approximately EUR 3.9 m), excluding VAT, calculated mainly on the basis of turnover registered by the cash registers.
Periods. However, a tax return should not be made if the income for this month does not exceed the value of PLN 17m. The Act provides for two tax rates: 0.8% of the tax base for the given month, no more than 170 million GEL in part, and an excess of 1.4% in excess of the tax base.
PLN 170 m.
The retail law includes some exceptions to taxation, including:
- Energy, water, natural gas, heat supply to consumers through network utilities
- Supply of some fuels for heating fuel purposes
- Delivery of medicines, special purpose food, reimbursable or partially reimbursable medical products.
Tax relief on civil law activities
The Civil Service Act (CLAT) is produced in certain contracts and in case of making additions to these contracts, if it causes CLAT base growth, for example:
• Contracts for the sale and exchange of property rights (unless subject to VAT)
• Loan agreements
• Basis for partnership or company.
However, a transaction is not subject to CLAT if any party to the transaction is still subject to or exempt.
From VAT, without certain exceptions (e.g. selling real estate, selling stocks). The CLAT course depends on the type The agreement, or loans, is subject to a 2% CLAT rate (except for loans issued by shareholders by a capital company). Shares are subject to a 1% CLAT exchange rate, while a company’s share capital increase is 0.5%. CLAT course.