Tax rate
Progressive personal income tax (PIT) rates calculated based on tax scale:
Tax base:
more than PLN 120,000
up to PLN 120,000
Tax amounts to:
12% minus tax reducing amount of PLN 3,600
PLN 10,800 + 32% of excess amount over PLN 120,000
Solidarity Levy (PIT): 4% solidarity levy on income exceeding PLN 1 million annually
General tax-free amount: PLN 30,000
Subject to tax exemption are revenues of persons until 26 derived from employment, contract of mandate etc. up to the amount of PLN 85,528.
Special tax rates
19 % - optional flat-rate for income from business activity, applied upon notification
19% - for income from capital
19% - for income from private sales of real estate
Private rent - possible only lump sum taxation of revenues (no deduction of related costs, depreciation etc.): 8.5% - for revenues from rent up to PLN 100,000; 12,5% - from surplus exceeding PLN 100,000
Tax liability
Unlimited
Individuals resident in Poland (due to centre of vital interests or present in Poland for period longer than 183 days yearly), on worldwide income.
Limited
Individuals non-resident in Poland, on income obtained in Poland.
Tax assessment period
Calendar year
Income categories
Separate sources of income:
1. Employment
2. Activity performed in person
3. Business activity
4. Special branches of agriculture
5. Rents
6. Capital and royalties
7. Non-business sales of real estate or other goods
8. Business carried out through the Controlled Foreign Entity (CFE)
9. Unrealized gains
10. Other sources
Accounting
Individuals and partnerships carrying out buisness activity are obliged to maintain so called 'tax revenues and expenses ledger' (pol. "Podatkowa księga przychodów i rozchodów") according with the relevant Regulation of Minister of Finance.
Obligation to maintain full accounting books instead, in accordance with Polish Accounting Act - if revenues of business for the preceding tax year amounted to at least quivalent in Polish currency EUR 2.5 million net.
As of January 1, 2025, it is possible to choose to recognize income from self-employment (including start-ups), including those taxed according to the tax scale, 19% flat tax and lump-sum tax on a cash basis (rather than on an accrual basis). Conditions: revenues from business activities in the preceding year did not exceed PLN 1 million and the taxpayer does not keep books of account. A written statement on the choice of this method is required. Applied only in B2B transactions. Not aplied in case of transactions with related parties, entities from tax havens, and to revenues from the disposal of a tangible and intangible asset included in the records of tangible and intangible assets.
From January 1, 2026, Polish individual income taxpayers (PIT) are required to maintain accounting records exclusively in electronic form using accounting software.
Taxpayers must submit their accounting e-books to the tax authorities once a year, providing full visibility of their accounting and tax records.
Types of e-records for PIT taxpayers:
- JPK_PKPIR – Tax Revenue and Expense Ledger;
- JPK_EWP – Revenue Records (for lump-sum taxpayers);
- JPK_ST – Fixed Assets.
Deadlines for implementation:
- PIT taxpayers required to submit JPK_VAT must submit e-Books for 2026 by April 30, 2027;
- Other PIT taxpayers must submit e-Books for 2027 by April 30, 2028.
Exemptions:
- Taxpayers exempt from PIT;
- Taxpayers entitled to file paper returns (income fully exempt from PIT);
- Taxpayers maintaining simplified revenue and cost records.
Loss set-offs
Only possible within separate sources of income (income categories), including also capital losses and write-downs resulting from distributions which can be, generally, set-off against capital gains.
Exceptions for certain types of investment income, for real estate losses.
Loss carryback
Not possible
Loss carryforward
Basically, losses incurred within each of separate sources of income may be set-off with profits obtained from that source of income (exclusively) within the following 5 years, no more than 50% of loss annually.
Possibility to make a deduction by the amount of up to PLN 5 million in one of the above mentioned 5 years without regard to limitation to 50% of loss annually in this year.
Operating expenses
Expenses of the business.
Tax allowable expenses
Basically tax deductible costs are the ones incurred to generate taxable revenues from given source of income (e.g. business), or to maintain or secure that source of income.
There is a catalogue in the Polish PIT Act of various kinds of expenses whose tax deductability is excluded or limited.
Lump sum option
Optional lump sum taxation on registered revenues, generally with no deduction of related costs, applies to business income where revenues for the previous tax year did not exceed EUR 2 million, or for taxpayers starting a business in a given tax year regardless of revenue amount. This option excludes certain activities (e.g., pharmacies, currency exchange, excise goods production, certain financial services).
Notification
Required by the 20th day of the month following the month in which the first revenue was earned, or by the end of the year if the first revenue was earned in December. Alternatively, the election can be made via CEIDG-1 registration when starting the business.
Deductions
100% of social insurance contributions (ZUS) are deducted from the tax base. 50% of health insurance contributions are deducted from revenue.
Tax losses
Tax losses from standard PIT taxation cannot be carried forward when switching to lump sum taxation. Conversely, losses incurred under lump sum taxation cannot be utilized when switching to standard PIT.
Joint spousal filing
Not permitted under lump sum taxation for business income. However, lump sum taxation of private rental income does not preclude joint filing for other income taxed under the tax scale.
Tax rates (2026)
17% applies to free professional services such as translators, legal counsel, tax advisors, accountants, investment advisors, architects, engineers, and appraisers.
15% applies to advertising services, employment and recruitment services, management services (for unrelated parties), facility management, head office services, and certain financial services (excluding IT and data processing).
14% applies to healthcare services, photography services, certain architectural, engineering and design services, and certain translation and interpretation services (depending on PKWiU classification).
12% applies to IT services, programming, software development, data processing, and computer consulting.
10% applies to real estate buying and selling services (brokerage).
8.5% applies to rental of real property or means of transport, accommodation services, R&D services, general service activities not classified elsewhere, gastronomic activities (excluding alcohol above 1.5%), and manufacturing from customer-supplied materials. For private rental and accommodation services, the 8.5% rate applies only to the first PLN 100,000 of annual revenue, with the excess taxed at 12.5%.
5.5% applies to construction works and transport of goods using vehicles with payload capacity above 2 tonnes.
3% applies to trade activities, certain catering services, and production or sale of certain goods.
2% applies to sales of own plant and animal products processed in a non-industrial manner under specific circumstances.
Quarterly settlements
Available if the previous year's revenue did not exceed EUR 200,000. Taxpayers starting a business may also opt for quarterly settlements.
Motor vehicles
Basically depreciation over at least 5 years (in the case of used vehicles may be shortened to 2.5 years).
Depreciation of passenger cars, paid leasing fees and their insurance - tax deductible are the amounts allocated to car value not higher than PLN 150,000 (for electric cars the threshold is basically PLN 225,000, except for insurance).
Passenger car operating expenses (including non-deductible VAT, if this is the case) where the car is not exclusively used for business purposes - tax deductibility limited to 75% of incurred expenses.
Deduction of expenses incurred on behalf of employees due to use of private cars for taxpayer's business purposes up to official rate per kilometre (PLN 1.15 / 0.89).
Certain vehicles may be excluded from tax restrictions provided for passenger cars (e.g. van, multi-purpose vehicle, pick-up) under certain conditions.
Social insurance
100% social insurance contributions are deductible.
Medical insurance contributions are:
(a) non-deductible - in case of progressive taxation based on tax scale,
(b) deductible from revenues up to the amount of PLN 11,600 annually - in case of applying 19% flat-rate taxation of income from business activity,
(c) deductible from revenues in 50% - in case of lump sum taxation of revenues derived from business activity.
Medical insurance rates and rules for their assesment basis vary depending on mode of PIT taxation chosen by the taxpayer in a given year.
Withholding tax
Generally 20% for interest, royalties, certain types of activities performed in person and certain intangible services; in the case of capital gains - 19%.
Polish-based payer is obliged to withhold and pay the tax (also on behalf of the local beneficiary of investement income, where this is the case).
A DTA can provide for a lower rate of taxation or non-taxation.
'Due care' is required in order to use the relief; the tax residence certificate of the foreign taxpayer has to be obtained.
Relief is granted by reduction at source or with use of pay & refund mechanism.
Pay & refund mechanism applies basically to surplus of payments made to related party exceeding PLN 2 million in a given tax year, unless the payer submits the relevant statement to the tax office on lack of obstacles to apply the relief or the authority issued the relevant opinion on use of preferences.
Refund claim needs to be accompanied by detailed documentation to substantiate entitlement to use preference. Refund claim is submitted by the payment beneficiary (e.g. foreign taxpayer) or by the paying party under certain circumstances.
Payments for intangible services are not covered by the WHT pay and refund system.
Interest
20% tax rate or lower tax rate per applicable DTA.
Foreign taxpayer, resident in EU or EEG country or in Switzerland may choose taxation of that income in Poland based on general rules and with use of tax scale by way of submitting the relevant yearly tax return. If so - withheld tax is treated as tax prepayment. Conditions: (a) foreign tax residence certificate and (b) cooperation in the area of tax information exchange between Poland and beneficiary's country.
Royalties
20% tax rate or lower tax rate per applicable DTA.
Foreign taxpayer, resident in EU or EEG country or in Switzerland may choose taxation of that income in Poland based on general rules and with use of tax scale by way of submitting the relevant yearly tax return. If so - withheld tax is treated as tax prepayment. Conditions: (a) foreign tax residence certificate and (b) cooperation in the area of tax information exchange between Poland and beneficiary's country.
Dividends
19% tax rate or lower tax rate per applicable DTA.
19% tax from dividend obtained from the company subject to alternative CIT taxation of distributable net profits only is decreased by 70% / 90% of CIT paid with that respect by the company who distributed that dividend. 70 / 90 rate depends on whether the company that distributed dividend was taxed respectively with use of 20% or 10% CIT from distributable net profits (10% CIT applies to 'small taxpayers' or taxpayers starting up their business in a given tax year, 20% CIT - otherwise). If this is the case, PIT from obtained dividend is effectively decreased from 19% to 5% (where CIT rate was 20%) or respectively from 19% to 10% (where CIT rate was 10%).
