Taxation in Poland

In 1993, Poland implemented its Value Added Tax (polish Podatek od towarow i uslug) system.[3] Polish VAT is overseen by VAT acts and the Fiscal Penal Code, and is enforced by the Ministry of Finance .(Ministerstwo Finansow). [4]

Value-Added Tax applies to most trade in goods in Poland. 23% is the basic rate.[5] Lower rates of 8% and 5% also apply for foodstuffs.[6] Furthermore, some services are taxed at 0% tax rate or exempted from value-added tax (eg. financial and postal services).[7]

In 2017, tax rates were changed. Now, the tax is calculated using two tables. The first table does determine the amount of tax.

The second table is used to determine the tax-reducing amount from the tax.

Annual income	Tax-reducing amount(amount to subtract from the tax)
0 PLN - 6,600 PLN	1,188 PLN
6,600 PLN - 11,000 PLN	${\displaystyle 631.98\times (income-6,600) \over 4,400}$ PLN
11,000 PLN - 85,528 PLN	556.02 PLN
85,528 PLN - 127,000 PLN	${\displaystyle 556.02\times (income-85,528) \over 41,472}$PLN
over 127,000 PLN	0 PLN

In 2018, the tax scale was again changed. Income tax was calculated as follows:

The second table is used to determine the tax-reducing amount from the tax.

Annual income	Tax-reducing amount (amount to subtract from the tax)
0 PLN - 8,000 PLN	1,440 PLN
8,000 PLN - 13,000 PLN	${\displaystyle 883.98\times (income-8,000) \over 5,000}$ PLN
13,000 PLN - 85,528 PLN	556.02 PLN
85,528 PLN - 127,000 PLN	${\displaystyle 556.02\times (income-85,528) \over 41,472}$PLN
over 127,000 PLN	0 PLN

In 2019, the tax scale was again changed. Income tax in 2019 is calculated as follows[1]:

The second table is used to determine the tax-reducing amount from the tax.

Annual income	Tax-reducing amount (amount to subtract from the tax)
0 PLN - 8,000 PLN	1,420 PLN
8,000 PLN - 13,000 PLN	${\displaystyle 871.70\times (income-8,000) \over 5,000}$ PLN
13,000 PLN - 85,528 PLN	548.30 PLN
85,528 PLN - 127,000 PLN	${\displaystyle 548.30\times (income-85,528) \over 41,472}$PLN
over 127,000 PLN	0 PLN

In 2020, the tax scale was changed again. Income tax in 2020 is calculated as follows[1]:

The second table is used to determine the tax-reducing amount from the tax in 2020.

Annual income	Tax-reducing amount (amount to subtract from the tax)
0 PLN - 8,000 PLN	1,360 PLN
8,000 PLN - 13,000 PLN	${\displaystyle 834.88\times (income-8,000) \over 5,000}$ PLN
13,000 PLN - 85,528 PLN	525.12 PLN
85,528 PLN - 127,000 PLN	${\displaystyle 525.12\times (income-85,528) \over 41,472}$PLN
over 127,000 PLN	0 PLN

Furthermore, a range of social security contributions apply to all in the workforce, and are shared by the employee and the employer. These insurance contributions are paid by both private and public employees until a given ceiling. For the year 2014, the rates in the following table apply[8]

Overall worker tax rate and mandatory insurance amount to 53%.

The cap of salaries in 2020, for which rates below apply, is PLN 156,810.[9]

• Economy of Poland