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Taxation in Poland
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Taxation in Poland

Corporate Tax

Main rate: 19%

Resident companies are taxed on their worldwide income; non-resident companies are taxed only on income sourced in Poland. A company is resident in Poland if its legal seat or management office is situated in Poland. Tax is imposed at a rate of 19%.

Dividends paid to corporate and individual resident shareholders are subject to a withholding tax of 19%, unless the dividends are paid between members of a tax group or the dividends qualify for exemption under the EC Parent-Subsidiary Directive. A corporate group may be formed where there is a 95% shareholding, subject to certain conditions.

Individual Tax

Progressive rates up to 40%

Under the Polish Personal Income Tax (PIT) Law, individuals may be subject to limited or unlimited tax liability in Poland. The tax status of an individual depends on whether the individual has a permanent residence in Poland (a place at which the person stays with an intention to remain permanently). Polish residents are taxed on worldwide income, whereas individuals with non-resident status are taxed only on Polish-source income.

Generally, personal income tax is levied at progressive rates of 19%, 30% and 40%. A flat rate tax of 19% applies to certain types of income such as dividends and interest. Under some conditions, an individual may elect to be taxed at a flat rate of 19% on business income.

Capital Gains

Gains on disposal of business assets are taxed as income

Capital gains of companies and individuals from the disposal of business assets are taxed as income. Capital gains of individuals from the sale of shares are taxed at a 19% rate (separately from income). Income derived by an individual on the sale of a dwelling, other building or land not used for business purposes is subject to a 10% rate. Such gains may be exempt from taxation if the proceeds are used to purchase another asset within two years or if the sale takes place five years after the purchase or creation of the asset.

Indirect Tax

VAT standard rate: 22% ; Lower rates: 7%, 3%

Value-added tax (VAT) applies to most transactions (supplies of goods and services) at a standard rate of 22%. Items subject to the reduced rate of 7% include food, books and newspapers, services relating to agriculture and forestry, and some healthcare products. A 3% rate applies to agricultural products and some unprocessed food products. Exports are zero-rated. Exemptions include financial services and services related to science, the development of technology (in certain cases) and certain cultural services.

Registration is compulsory for businesses with annual turnover above €10,000. Taxpayers from outside the EU that register for VAT in Poland must appoint a tax representative.

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