POLAND Trends and Developments Contributed by: Piotr Augustyniak, Nash Concept Ltd
• the protection of cultural heritage; and • the promotion of physical culture.
Relocating families attach increasing weight to per - sonal security, and here the contrast with several Western European capitals is marked: Poland records among the lowest rates of violent and street crime in the European Union. The observation most often repeated by clients is a small one, but telling: a fine watch can be worn openly on the wrist in Warsaw, Kraków or Sopot – a liberty that has quietly disap - peared from a number of cities in which such families were previously established. These qualities convert the tax arithmetic of the regime into a practical family decision, and they explain why relocation enquiries now come not only from the Polish diaspora but from internationally mobile principals without prior Polish connections. Assessment and points of caution The aggregate annual cost of the regime for a princi - pal taxpayer is therefore PLN300,000 – the lump sum together with the qualifying expenditure – regardless of whether the foreign income of the year amounts to PLN1 million or PLN100 million. Measured against the Italian substitute tax, now EUR300,000, or against ordinary Polish progressive taxation with the solidarity levy of 4% on income above PLN1 million, the arith - metic is plainly favourable for persons with substantial foreign passive income. Poland, moreover, levies no net wealth tax, so that the lump sum is not, as in Swit - zerland, accompanied by a separate cantonal charge on capital. Three points nonetheless call for care. First, the treaty position of a person taxed under the regime should be verified in each source state: while the taxpayer is unquestionably a Polish resident under domestic law, the willingness of foreign administrations to grant trea - ty relief to persons taxed on a lump-sum basis is not uniform and should be examined before relocation, not after it. Secondly, Poland grants no step-up in the basis of assets upon immigration; upon expiry of the ten-year period, unrealised gains accrued historically will, if then realised, be measured against original cost and taxed at the general rate of 19%, which argues for a deliberate sequencing of disposals during the cur - rency of the regime. Thirdly, the interpretive practice of the Director of the National Fiscal Information remains in its formative stage; individual rulings issued in 2024 and 2025 have confirmed, among other matters, the
Expenditure in excess of the annual minimum is taken into account in subsequent tax years. The taxpayer submits, by the end of January of the following year, a written statement confirming that the expendi - ture has been incurred, together with documentary evidence. Failure to satisfy the obligation results in the loss of the right to taxation under the regime. In practice the obligation is less a burden than an instru - ment: for families with an established philanthropic programme – patronage of the operatic or musical heritage, endowment of academic chairs, support of sporting institutions – the required expenditure can be aligned with commitments that would in any event have been made. Family members and duration A member of the taxpayer’s family may elect taxa - tion of their own foreign income at a reduced lump sum of PLN100,000 per tax year. The family member is not subject to the expenditure obligation, and the entitlement is accessory in character: it lapses upon the principal taxpayer’s loss of the right to the regime. Taxation under Chapter 6b is available for a maximum of ten consecutive tax years, counted from the year in which residence was transferred. The right is lost upon renunciation, failure to pay the lump sum or to incur the required expenditure, and upon the loss of Polish residence. The destination itself The fiscal case does not stand alone. Poland is today the sixth-largest economy of the European Union and has entered the ranks of the 20 largest in the world, with output approaching USD1 trillion and an eco - nomic record – more than three decades of almost uninterrupted growth – that is unmatched in Europe over the same period. Warsaw has matured into a genuine financial and technological centre, transport and digital infrastructure now meet a standard that surprises visitors whose image of the country was formed a generation ago, and the cost of a com - fortable establishment – housing, schooling, private medicine – remains well below that of the traditional destination cities.
550 CHAMBERS.COM
Powered by FlippingBook