POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
Payment of Tax and Reporting Duties The employer is obliged to calculate and remit the tax advances to the relevant tax office, and the health insurance and other social security contributions to the Social Security Office (ZUS). Employees are obliged to make annual tax filings (which may be done electronically). Employees who do not intend to take advantage of any allowances or deductions and who settle under the general rules (tax scale at 12% and 32% rates) and only receive income settled through a remitter (eg, employer or principal) may leave the tax settlement to the tax office. 5.2 Taxes Applicable to Businesses Company Income Tax (CIT) Legal entities in Poland are obliged to pay CIT on their income in Poland, at the rate of 19%. A reduced 9% rate applies to taxpayers in the first year of start - ing a business and to those taxpayers whose annual income (including VAT) does not exceed EUR2 million. In respect of partnerships that are tax-transparent, tax is payable by partners (CIT for partners that are legal entities; PIT for individuals). Partnerships limited by shares and limited partnerships are treated as CIT payers (ie, non-tax-transparent entities), with special tax reliefs for limited partners. The CIT Act provides for specific rules to determine whether or not an item may count as a tax-deductible cost, and expressly identifies a list of items that can - not constitute tax-deductible costs. Certain allowanc - es and reliefs may be available (eg, a 50% allowance in respect of the acquisition of new technologies). The tax basis is calculated separately for capital gains (as defined in the CIT Act) and other incomes. “Minimal” CIT of 10% came into force in 2024. There - fore, an entity that has incurred an income loss (other than capital gains source) or whose tax yield in the basket of so-called operating profits does not exceed 2% is taxed at 10% of the taxable base. The CIT Act also provides for a number of other exemptions from the “minimal” tax for certain entities.
and for certain donations made to charity and/or if they have children who are: • under 18; • under 25 and continuing their education without having their own income; or • disabled and receiving special benefits. From 2022, health insurance contributions are no longer tax-deductible costs for employees. However, certain employees who create IP rights as part of their duties may be eligible for lump-sum costs at the rate of 50% of the portion of their remuneration allocated to such IP rights (provided that such costs do not Health insurance contributions are paid by the employ - ee at the rate of 9%. Social security contributions (to finance retirement, disability pensions and sick leave benefits) may total up to 29.97% – ie, 13.71% payable by the employee (as a non-deductible cost) and 16.26% payable by and tax-deductible for the employer. The basis for calculation of the retirement and disability pensions contributions is capped at PLN282,600 for 2026. Additional occupational accident contributions and some other social security contributions payable by and tax-deductible for employers may apply, depend - ing on the circumstances and the type of business and work carried out, and the number of employees employed by the employer. Generally, the contribu - tions amount to the following: • for retirement – 19.52% of the basis of assess - ment; • for disability pensions – 8% of the basis of assess - ment; and • for sick leave benefits – 2.45% of the basis of assessment. exceed PLN120,000 in total). Social Security Contributions Social security contributions may differ slightly from the above (eg, for accident contributions, the rate var - ies from 0.67% to 3.33%, with the accident contribu - tion for a small company employing up to nine people being 1.67%).
867 CHAMBERS.COM
Powered by FlippingBook