Draft amendment to the Act on Personal Income Tax in Poland

On the 16th of July 2019 the Polish government adopted a draft amendment to the Act on Personal Income Tax in Poland.

As from the 1st of October 2019 PIT rate will be reduced from 18% to 17%. Additionally, the amount of the tax deductible costs for employees will be increased considerably as listed below:

– PLN 3000 annually (one employment, local) – currently PLN 1335,00,

– PLN 3600 annually (one employment, commuter) currently PLN 1668,72,

– PLN 4500 annually (multiple employment, local) currently PLN 2002,05,

– PLN 5400 per year (multiple employment, commuter) currently PLN 2550,56.

The changes without any raise in the gross salary will result in higher wages (net) for the employees. For example a person earning PLN 2250 (minimum remuneration for work in 2019) will receive more PLN 472 per year.

The tax reduction will apply to all taxpayers who settle their income according to the tax scale so not only employees but also pensioners, as well as entrepreneurs who have not opted for a flat tax rate or lump sum rate from registered income in relation to income from non-agricultural business activity. According to the assumptions about 25 million people will benefit from the new legislation.