From 1 March re-recorded employees[1] for Employee Capital Plans (hereinafter PPK). This was done in accordance with the provisions of the PPK Act, which provides for such an "autoscription" within four years. Since it is a voluntary institution, participants have the right to resign at any time.
We check the tax and depositing arrangements for deposits and withdrawals from PPK. Their knowledge will help to decide whether to join or withdraw from the PPK programme based not only on the analysis of the household budget, investment risk, but also systemic solutions in terms of budgetary burden.
The aim of the programme is to enable citizens to permanently lay down smaller amounts from their salaries.[2] and possible payments from the Labour Funds[3] for savings and pension purposes, as an additional tool of the third pension pillar.
These amounts go to the accounts selected by the employer in agreement with employees or trade unions, financial funds from among the PKP records. They shall manage the accounts entrusted in accordance with the defined investment rules in order to generate the profits that ultimately save the employee.
Payments to PPK
In the field of PPK we can distinguish three types of payments: (a) collected from the employee from his salary, (b) financed by the employer, (c) financed by the State, from the Labour Fund.
PK Act under Article 2(1)(40) defines remuneration as ‘the basis for the assessment of the pension and pension contributions of a PPK participant referred to in Act dated 13 October 1998 on the social security system[4], without applying the restriction in question under Article 19(1) that Act, and excluding the basis for the assessment of the pension and pension contributions of persons on parental leave and receiving maternity or maternity allowance.’ Thus, every contribution of an employee and employer is calculated on the amount of gross remuneration, i.e. before public-law deductions are made.
No tax or social security contributions shall be levied on contributions financed by employees and allowances from the Labour Funds. Such payment shall be deducted directly from the participant's remuneration[5].
Taxes and charges are therefore made at the time of payment of the remuneration and the contribution to the PPK itself is tax neutral. One-time welcome payment and annual payments from the Labour Funds shall be exempt from taxation on the basis of Article 21(1)(47f) Act dated 26 July 1991 on income tax on individuals (i.e.
Journal of Laws of 2022, item 2647 as amended, Further: PIT Act).
This is not the case in the case of employer contributions. They represent the cost of obtaining income according to Article 22(1bc)(6bc) the PIT Act and Article 15(1da)(4ga) Act dated 15 February 1992 on corporate income tax (i.e. Journal of Laws of 2022, item 2587 as amended).
It should be mentioned that they represent a cost in that month for which they are due, if they have been discharged in due time. This is therefore the month for which the employee's remuneration is due on the basis of the calculation of the amount of the payment financed by the employer.
Payments made after the deadline shall constitute the cost in the month of their payment to the financial institution and made before the deadline shall be treated as if they were made within the time limit.
For an employee, payments financed by the employer constitute income[6] and as such are taxed in accordance with the general rules, i.e. they are charged and charged an advance in accordance with the applicable tax scale. The revenue arises at the time of the transfer of the payment to the PPK.
If payments to the PKP are made after payment of the remuneration and the employer has nothing to charge, this may result in a tax surcharge at the end of the tax year. The ideal solution is to make payments at the time of payment.
If a PPK participant benefits from reductions PIT-0[7] also the income from contributions financed by the employer is exempt from taxation and should be taken into account together with other revenue when setting the limit 85,528 PLN.
The employer's funding is also not the basis for the assessment of pension contributions[8], and thus other loads of this kind.
Special purpose payments from PPK
The PPK Act provides for several options for a participant to pay out funds. Among them, we can distinguish between payments in a general sense, in relation to the transfer of funds saved to a private bank account and special-purpose payments. By way of special-purpose payments, this Article shall read:
transfer payment,
This appropriation is intended to cover the following:
payment of funds in case of serious illness.
Transfer payment[9], is the transfer of funds from one PCP account to another account of the participant, the person entitled or the spouse of the deceased PPK participant; the Individual Pension Account (IKE) of the spouse of the deceased participant or the IKE of the authorised person; the timely savings account, the fixed-term deposit carried out in the cooperative savings and credit account of the PPK participant, after it has reached its 60. one year of age, or designated by the spouse or ex-wife of a member of the CSD; to an insurance undertaking established in Chapter I of the group 3 Annex to the Act on Insurance and Reinsurance Activities[10].
Of all the above forms of payment, the transfer of funds between a participant’s PKI accounts or to an insurance undertaking shall be exempt from taxation; in addition, after years have been achieved, 60-(i) the transfer of funds to the account of a timely savings account or a timely deposit of a participant;[11].
No taxation[12] it will also occur in the case of a payment to cover its own contribution in connection with the borrowing of a mortgage, but such a right can only be exercised once.
In this case, however, the total contribution must be reimbursed no later than 15 years and the reimbursement period may not start earlier than 5 years, from the date of payment. These rules shall be established in accordance with the agreement between the participant and the selected financial institution.
Non-payment in accordance with the provisions of the Agreement will mean the taxation of the unpaid amount by flat-rate tax of 19%[13], This revenue may be deducted from the purchase costs of purchased units or decommitted settlement units for that undrawn refund.
This type of withdrawal is only available to participants who have not completed 45. years of age.
In case of payment of funds related to a serious illness, the PK Act allows payment to 25% funds collected in the PKP account, in the event of its occurrence in the PKP participant, his spouse or the child. Such payment shall not be taxable[14].
The PK Act defines a serious illness under Article 2(1)(23) and mentions, among others, total inability to work, moderate or significant degree of disability or diagnosis of disease units such as Alzheimer's disease or multiple sclerosis.
It is also possible to use this kind of payment multiple times, which is highlighted as a possible area for abuse by participants of PPK. The safety against this is the obligation to attach medical examiner’s decisions or certificates confirming the diagnosis of serious illness.
Basic payments from PPK
The system of occupational capital plans, as voluntary and does not restrict the possibility of early payment of funds, as is the case with the PPE, for example[15] Or OFE. Each participant shall have the possibility to withdraw funds before reaching the statutory limit age, i.e. 60-It's been a while. However, this implies differences in the approach to the amount of return and taxation obtained.
In the case of participants who choose to pay the funds collected in the PKP account after reaching 60. the year of age, the Act provides for the possibility of payment of funds without the obligation to tax them. No tax will be collected on the funds paid if[16]:
- Downloaded maximum 25% one-off measures,
- other funds from the ICP account will be paid at least 120 monthly instalments.
The Participant may at any time modify the declared number of instalments, but if at least the payment of funds was to take place in the original declaration 10 years, the participant may not change the number of instalments in such a way that, after the change in the payment of the instalments, the amount of the appropriations is less than 10 years.
‘The start of the payment process with PPK does not mean that the interest rates collected and still held there will fall to zero. These measures will continue to be invested in financial instruments giving a positive rate of return’[17], which will also affect the amount of individual instalments.
For a participant who has reached age 60-Within a few years, it is possible to apply for payment of funds collected in his PKP account in the form of a marriage benefit.
A similar payment may be made to a marriage after a common border age has been exceeded if the agreement to operate the PPK has been concluded with the same selected financial institution. Such benefits shall be paid at least 120 instalments and are also exempt.
In the event of death one the spouse's benefits shall be paid second to a spouse of up to now, until the funds entered in the marriage account are exhausted[18].
If a payment is made in a manner other than that indicated in the PPK Act, which is completely acceptable, the participant shall at the same time accept the taxation of the payments received by the so-called ‘Belka tax’ of 19% resources received[19]. It shall therefore be informed thereof before taking its decision.
Similarly, payment of funds before reaching the limit age will be subject to taxation.
In both cases, the tax payer will be the financial institution conducting the PPK and the taxable amount shall be the amount of the refund less the expenditure on the acquisition of the purchased units or payments to the decommissioned settlement units from which the return was made to the PPK participant.
Repayment before reaching 60. the year of age is associated with additional reductions:[20]
the financial institution will transfer to the account indicated by ZUS an amount equal to 30% of the funds originating from contributions financed by the employer, which will be recorded in the account of an employee at ZUS as a pension contribution due for the month in which the amount was transferred to ZUS,
through the Polish Development Fund (PFR), to the bank account indicated by the Minister responsible for labour matters, the amount corresponding to the money received from the welcome payment and annual payments.
This therefore results in a significant loss of funds collected in the PKP account.
Payments to persons third
The Act also provides for the possibility of payment to persons third in the event of divorce or annulment of a marriage or in the case of the death of a participant.
In the event of the participant's death, at the request of the spouse or the rightholder, the funds in the PKP account may be transferred to their PKP, IKE, EPP account or returned in monetary form. Such measures shall be exempt from both income tax[21] as well as inheritance and donation tax[22].
The funds collected in the PKP account shall also be broken down in the event of divorce or annulment of the marriage as a division of the assets of the joint spouses. Transfer of such funds to the CSD account second the spouse is exempt from taxation. The payment of such funds in monetary form is subject to the same rules as if the PPK participant itself was paying them at that time[23].
[1] In the text of the article, the concept of worker is understood broadly and covers both employees, natural persons carrying out the work of the superintendent, members of agricultural production cooperatives or cooperatives of agricultural circles, agents, contractors or employees under other civil law contracts, etc. in accordance with the provisions of the Article 2(1)(18) Act dated 4 October 2018 on employee capital plans (i.e. Journal of Laws of 2023, item 46, hereinafter: PK Act).
[2] From 3.5% up to 8% gross remuneration, of which 2-4% the employer makes the contribution. This concept in the text of the article is treated within the meaning of the term ‘entity’ from Article 2(1)(21) PK Act. This will make reading much easier.
[3] 240 PLN annual and 250 PLN an initial fee after meeting the conditions of Article 31(32) PK Act.
[4] (t.j. Journal of Laws of 2022, item 1009 as amended).
[5] Article 27(9) PK Act
[6] Article 12(1) PIT Act
[7] Relief for young people, relief for families 4+, relief to return or relief to senior.
[8] Article 26(5) PK Act
[9] According to Article 2(1)(42) PK Act
[10] Act dated 11 September 2015 on insurance and reinsurance activities (i.e. Journal of Laws of 2022, item 2283 as amended).
[11] Article 21(1)(58c) point (c) PIT Act
[12] Article 21(1)(58b) PIT Act
[13] Article 30a(1)(11a) PIT Act
[14] Article 21(1)(58b) PIT Act
[15] Staff Pension Programmes established Act dated 20 April 2004 on occupational pension schemes (i.e. Journal of Laws of 2021, item 2139 as amended).
[16] Article 99 PK Act
[17] S. Jakubowski [in:] A. Prusik, S. Jakubowski, Employee Capital Plans. Commentary, Warsaw 2019, Article 99.
[18] Article 100 PK Act
[19] According to Article 30a(1)(11b) PIT Act
[20] Article 105 PK Act
[21] Article 21(1)(47g) PIT Act
[22] Article 3(4a) Act dated 28 July 1983 on inheritance and donation tax (i.e. Journal of Laws of 2021, item 1043 as amended). Since such payment is exempt from taxation, it is also not mandatory to inform the tax office of the funds received.
[23] This means that if the spouse from which the PPK account is paid has reached age 60-This payment is not subject to taxation or deductions for a period of several years