Tax concessions
Last reviewed 21 Aug 2023
Direct
Tax attributable to not deducted surplus of R&D relief may be returned in cash to taxable person if that surplus came out for a tax year in which the taxable person started up business (not applicable in case of restructuring); same applies as to surplus for next tax year where the taxable person is micro, small and medium sized-enterprises.
Surplus of child deduction over yearly tax calculated in parent's yearly income tax return shall be returned to him or her in cash.
Indirect
Income tax concessions, e.g.
Income derived from commercialized R&D works is subject to preferential 5% tax rate (CIT or PIT respectively), under certain conditions. Specific rules for tax assessment basis have to be observed. Incurred losses from commercialized R&D works are subject to standard rules for loss carryforward within 5 years period.
9% reduced CIT rate applies to income from operational activity obtained by (a) so called 'small taxpayers' (i.e. the ones whose revenues had not exceeded expressed in PLN an amount equivalent to the equivalent of EUR 2 million gross in the year preceding a given tax year) or (b) taxpayers starting-up their buisness in a given tax year; condition: revenues of those taxpayers do not exceed expressed in PLN an amount equivalent to the equivalent of EUR 2 million net in a taxable year.
In case of alternative CIT taxation of distributable net profits solely, reduced 10% CIT rate applies to 'small taxpayers' or taxpayers starting-up their business in a given tax year.
Tax credits
Family bonus plan:
Joint taxation of spouses: option possible in certain circumstances;
1st step: calculating tax on half of the spouses' total income;
2nd step: determining actual joint tax in double the amount of tax calculated in 1st step;
Potential benefits: lower amount of earnings may be moved to a higher tax scale (from 12% to 32% in progressive taxation), effective use of double value of tax-free amount;
Most profitable for spouses when one of them has no income or obtained much less income than the other.
Relief applies respectively to residents of EU / EEA country or Switzerland.
Children surplus:
Anual revenues of parent raising at least 4 children are basically tax exempt up to the amount of PLN 85,528
Sole earner deduction pa.:
Taxation of a single parent: option possible in certain circumstances for a single parent or legal quardian raising children;
1st step: calculating tax on half of single parent's income;
2nd step: determining actual tax in double the amount of tax calculated in 1st step;
Benefits: less earnings of a single parent moved to a higher tax scale (from 12% to 32% in progressive taxation), using double value of tax-free amount (which would not be used, otherwise, in the case of a child not earning at all);
In case of raising adult child until the age of 25, learner, parent may apply concession provided that the child did not obtain yearly income exceeding certain threshold, which is for 2024 - PLN 21,371.52;
Relief applies respectively to residents of EU / EEA country or Switzerland.
Single parent deduction pa.:
Taxation of a single parent: option possible in certain circumstances for a single parent or legal quardian raising children;
1st step: calculating tax on half of single parent's income;
2nd step: determining actual tax in double the amount of tax calculated in 1st step;
Benefits: less earnings of a single parent moved to a higher tax scale (from 12% to 32% in progressive taxation), using double value of tax-free amount (which would not be used, otherwise, in the case of a child not earning at all);
In case of raising adult child until the age of 25, learner, parent may apply concession provided that the child did not obtain yearly income exceeding certain threshold, which is for 2024 - PLN 21,371.52;
Relief applies respectively to residents of EU / EEA country or Switzerland.
Child deduction:
Amounts deductible from anual tax of parent/s, legal guardians or foster parent/s; amounts to be shared respectively by both parents:
(a) up to PLN 1,112.04 (depending on number of months of childcare) - for raising one child; provided that total parent/s' income did not exceed certain thresholds annually (those thresholds do not apply where more than 1 child was raised),
(b) up to PLN 1,112.04 - for each of 2 children raised;
(c) up to PLN 2,000.04 - for 3rd child,
(d) up to PLN 2,700.00 - for 4th child and each of the following ones.
In case of raising adult child until the age of 25, learner, parent may apply concession provided that the child did not obtain yearly income exceeding certain threshold, which is for 2024 - PLN 21,371.52.
The parent shall receive the surplus of this relief over yearly tax calculated in his or her yearly income tax return.
Relief applies respectively to residents of EU / EEA country or Switzerland.
Alimony dedcution:
Alimony is tax exempted if received:
(a) for children until the age of 25 as well as other if beneficiary of attandance allowance or social pension,
(b) for other person up to PLN 700 monthly, if alimony was granted by court.
If in employment / pension income p.a.
Both income derived from employment contract and pensions are subject to progressive taxation based on tax scale.
Anual revenues of working senior (men - over 65, women - over 60) are tax exempt up to the amount of PLN 85,528 provided that he or she does not collect pension although entitled to it.
Basically income obtained by the child until the age of 18 is summed up with parents' income for tax purposes; however pensions obtained by a child until the age of 18 are not summed up with parents' income; then the pension is treated as child's income; possibility to use its attributable tax-free amount; survivor's pension obtained by child until 18 is free of health insurance contributions.
Allowances and exemptions
Profit allowance:
N/A
Investment allowance:
Tax exemption applies to income obtained from buisness whose subject was determined in the relevant support decision issued under the state aid regulations. Relief concerns income obtained in relation with a given location of the investment specified in the decision. Relief is a form of reimbursement of costs of the investment project. Tax relief to which the entrepreneur is entitled applies up to the amount calculated based on investment expenditure, labor costs etc. related with realization of the project.
Support decision is issued for a definite period, not less than 10 and not longer than 15 years, depending on the intensity of public aid in a given area.
For the purpose of tax relief, activities carried out based on support decision are separated organizationally from other activities of the entrepreneur, if this is the case.
Losses related to tax exempt income are not subject to loss carryforward.
Government subsidies
Usually granted under certain programs financed from national or EU funds aimed at supporting investment, R&D projects, infrastructure developments, trainings etc.
As a rule granted based on agreement concluded between beneficiary and responsible institution. The agreement specifies in particular the amount of support and conditions to be fulfilled, e.g. in terms of creating new jobs, incurring certain amounts of investment expenditures, conducting R&D activities or trainings etc.
