POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
5. Tax Law 5.1 Taxes Applicable to Employees/ Employers Personal Income Tax (PIT) In principle, employees in Poland are subject to PIT at the rate of 12%, provided that a 32% rate applies on the portion of the taxable profit exceeding PLN120,000 in the tax year. Certain incomes are taxable at 19% or 20% flat PIT rates. Incomes from different sources are not mixed, and tax is calculated for each source of income separately. Tax-reducing amounts apply, ranging from PLN3,600 (if the annual income is PLN120,000) to PLN10,800 (if the annual income exceeds PLN120,000). No tax is effectively payable on an annual income of up to PLN30,000. Income of up to PLN85,528 received by a person under the age of 26 is exempt from PIT. A limited number of reliefs and allowances may be available to employees – eg, for the use of the internet and for certain donations made to char - ity and/or if they have children who are: • under 18; • under 25 and continuing their education with - out 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 por - tion of their remuneration allocated to such IP rights (provided that such costs do not exceed PLN120,000 in total).
4.5 Employee Representations In principle, there is no legal requirement to have any kind of employee representation. However, a company that has more than 50 employees is obliged to inform employees that they may (but are not obliged to) set up a works council. Works councils have consultation and informa - tion rights, but they do not participate in the management of the company. Employees of privatised companies have certain rights of representation on the supervisory board. If the company has more than 500 employees on average over the year, the employees have the right to elect one member of the management board. Trade unions, if present at the company, retain significant influence; negotiations with trade unions may be required in some situations, par - ticularly if there is a planned collective redun - dancy. In general, under Polish law, there are no requirements to negotiate or consult with trade unions or works councils when a Polish com - pany or its assets are being acquired. However, such negotiations or information obligations are common when the company being sold is state- owned. If there are no trade unions, in some situations the law requires the employer to inform/consult employee representatives. Employee represent - atives can be elected ad hoc for this purpose, or a permanent employee representation may be formed at the employer.
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