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TAX SYSTEM IN POLAND


Tax System

In Poland, the tax system consists of two types of taxes: indirect and direct ones. Indirect taxes: Value Added Tax (V.A.T.), Escise Tax, Games and Lotteries Tax. Direct taxes: Individual Income Tax, Corporate Income Tax, Inheritance and Donation Tax, Civil Law Transaction Tax, Agricultural Tax, Real Property Tax, Transport Vehicle Tax, Tonnage Tax, Tax on Extraction of Minerals.

1. Value Added Tax (V.A.T)
Taxpayers:
natural persons, legal persons, entities with no legal person status which, doing business with a tax-obliged person, is required to deduct and pay the tax to a revenue office on a reqired date.
Tax base
: supply of goods and/or services in Poland, export of goods from Poland, import of goods to Poland, supply and/or purchase of goods to/from other EU state.
Tax rates
: 23%, 8%, 5%, 0%.

2. Individual (natural person) Income Tax (PIT)
Taxpayers
: natural persons.
Tax base
: income earned by those individuals who are obliged to pay taxes in Poland - total income (from all sources) with no difference regarding the place of existence of income sources.
Tax rates
: 18%, 32%.

3. Legal Person Income Tax (CIT)
Taxpayers
: legal persons, entities with no legal person status, capital groups, companies with no legal person status having their registered seat in another country if, according to laws of the said country, are regarded as legal persons and are obliged to pay taxes on their income irrespective of the place of earning income.
Tax base
: income from all sources (regardless a type of source of income)
Tax rates
: 19%.

4. Civil Law Transaction Tax (PCC)
Taxpayers
: natural persons who made a deal of a civil law type.
Tax base
: civil law transactions: sale of a real property, sale of other property , of pereptual usufruct right, of ownership of a cooperative right to premises (living apartments, business premises and other smiliar cooperative rights), and other property rights.
Tax rates
: 2%, 1%.

5. Avoiding of Double Taxation Agreement

Poland is a party of more than 50 such agreements, with all EU states and, of course, with the Republic of Croatia, too.

6. Most Important Tax Exemptions
1. Reinvested profit – if profit is invested in opening capital (share capital) of a lawfully registered company in order to increase the capital, income tax will be required. However, if profit is allocated to the company's reserve or supplementary fund, no tax will be levied.

2. A tax on a source of income will not be required if a tax-payer has got a tax residence certificate. By this document, it is certified that a tax-payer (natural or legal person) is a tax-resident of some other state so he/she pays income tax on all his/her income in that country which issued a tax residence certificate.

3. Dividend and profit share tax – a foreign subject who receives dividends from any other EU state do not pay the said tax in Poland (19%) if he/she does possess not less than 10% of the capital for at least a continued period of 24 months.

4. Tax on transfer of a real estate – will not be required if the real property is given to a cmpany in the form of assets in kind in order to either establish the company or increase company's opening capital. Further, the said tax will not be levied when a real estate is acquired witin a procedure of taking over, amalgamation or division of a company.

 

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