Government programme under the title Polish Deal and its subsequent modifications did not fully establish such a desirable and promised order to Poles. Drastic tax changes have caused considerable confusion and introduced much doubt on the part of both taxpayers and taxpayers and even tax authorities.
An attempt to mitigate the negative effects has been made by the Government Programme "Low Taxes", also called "Polish Deal 2.0.”.
It is worth paying more attention to the numerous new reductions that have been introduced into the tax system by Polish Deal such as: relief for working seniors, relief for families 4+ and a relief to come back. The last of these will be presented in this article. .
The relief for return is to encourage Poles and people of Polish origin (confirmed by having the Polish Charter), to come and settle in Poland. The relief consists in granting income tax exemption in the amount of revenue not exceeding the amount 85,528 PLN Within 4 years. The relief applies to individuals who have 31 December 2021 changed their tax residence to Poland and they did not have a place of residence in Poland for an appropriate period.
Who is entitled to benefit from the relief to return?
a taxable person who, as a result of the transfer of his place of residence to Poland, 31 December 2021 is subject to an unlimited tax obligation,
taxable person who did not have a place of residence in Poland during the period third the calendar years immediately preceding the year and from the beginning of the year to the day preceding the day on which he returned to Poland, and
has a Polish nationality, a Polish Charter or a nationality other than a Polish Member State of the European Union or a State belonging to the European Economic Area or the Swiss Confederation, or has resided continuously:
- for at least three years in a Member State of the European Union or a country belonging to the European Economic Area, the Swiss Confederation, Australia, the Republic of Chile, the State of Israel, Japan, Canada, the Mexican United States, New Zealand, the Republic of Korea, the United Kingdom of Great Britain and Northern Ireland or the United States of America,
- in Poland for at least 5 calendar years preceding the three-year period, and
holds a residence certificate or other proof of residence for tax purposes for the period necessary to establish the right to that exemption; and
did not benefit previously, in whole or in part, from this exemption, where he relocates his residence in Poland.[1]
What is included in the relief to return?
The relief for return covers various sources of income, including:
- from work on the study (employment contract, business relationship, overlay work),
- the contract of the order,
- from maternity allowance,
- from economic activities taxed on a tax scale or 19% a linear tax and a lump sum on recorded revenue,
- achieved in successive successive sequences four tax years.
An important aspect is that not all revenue is relieved. Revenues such as revenue from a work contract, copyright or income tax exempt under other provisions are excluded from the application of the return allowance. The amount of revenue that benefits from the exemption shall be 85,528 in the tax year. If the amount of the refund is exceeded, if the revenue is settled on a general basis, the tax-free amount of 30,000 PLN, which together gives us an amount of 115,528 PLN, which is tax-free.
Another important aspect is the moment when the relief for return is started.
The good news is that thanks to the project “Polish Deal 2.0” and amending the provisions in force from 1 January 2023 taxpayers who return to Poland already at the stage of advance payments will be able to take into account the amount of the relief, which was not included in first changes from 1 January 2022 Of course, this means that her full account will be made In the next the tax year.
The possibility of applying reductions in the current tax year is implemented by submitting a form PIT-2 or an appropriate statement to the payer.
[1] https://www.podatki.gov.pl/media/8300/np_-_przewodnik_ulga_na_powrot.pdf Article 21(43) Act dated 26 July 1991 on income tax on individuals (i.e. Journal of Laws of 2022, item 2647 as amended).
Author: Darya Bannaya
Tax consultant in Russell Bedford Poland. Graduate of Law at the Faculty of Law and Administration at the University of Warsaw, graduate of Global Business, Finance and Management at Warsaw School of Economics. Winner of the Ministry of Finance competition “Tax of Leaders” 7. edition. Conducting trainings and conferences for foreigners in tax aspects of conducting and establishing business in Poland. He specializes in tax law, advising clients on current matters relating primarily to income taxes.