Everything about corporate income tax in Poland


Income tax is a cash benefit which must be paid by natural and legal persons for the benefit of the State Treasury, a voivodship, a poviat or a commune. Their amount depends on the income and deductions used. In Poland, all legal provisions related to the discharge of taxes are determined by tax law, which is based on the Constitution of the Republic of Poland.

Corporate income tax

Corporate income tax applies to all legal entities. It does not matter how they acquired this personality. The tax also covers capital companies in the organization and limited joint-stock partnerships. There are also institutions that are exempt from corporation tax, for example, the State Treasury, budgetary units, the National Bank of Poland and investment funds. It is assumed that income is understood here as any property donation which is permanent and non-returnable. The revenues that must be settled by legal persons include revenues from business activity, the value of free benefits and revenues from paid disposal of property or property rights. The Act also defines a large list of incidents that are not treated as income and are not taxable. For example, they may be interesting not received on loans and credits granted and contributions to the cooperative returned.

Income tax from individuals

Income tax on individuals is a benefit that includes income earned by individuals, that is, any entity that has legal personality. In connection with this type of tax, there are two additional concepts, namely the principle of residence and unlimited tax liability. The first one concerns tax settlement in the place where the person lives. On the other hand, unlimited tax liability should be understood as a rule that requires every natural person to pay the entire tax on domestic and foreign incomes. In the case when the place of residence is unknown, the decision is made on the basis of the source principle, i.e. based on the place where the revenues are generated. It is worth noting that it is possible for a natural person to be taxed twice with income earned in the country in which the taxpayer lives and in the source income country. Of course, the subject of taxation is income, which is understood as the surplus of the sum of revenues over the costs of obtaining them, and which has been achieved in a given tax year.

Progressive tax

A progressive tax is linked to two tax rates, or 18% and 32%. The first one concerns people whose companies earn up to PLN 85 thousand a year. If this threshold is exceeded, the taxpayer starts to settle at 32% of the rate. In short, the more a given entrepreneur earns, the more taxes he must pay. As income, it means all funds that affect the company’s account but only after deducting the costs of running a business and the benefits specified in the Act.

Line tax

When settling with a flat tax, all of them use a fixed rate of 19%, regardless of their income. This is a significant simplification of the income tax system, which leads to the abolition of tax-free funds as well as tax reliefs. Supporters of this type of depression argue that this is the fairest way of taxing citizens. The flat tax is particularly beneficial for entrepreneurs who achieve high income. It should be remembered that a taxpayer can here deduct only social security contributions and tax on health insurance contributions from income.

Flat tax

This tax is a simplified way of settling tax claims from entrepreneurs. Taxpayers who decide on this method of revenue settlement must have a register of revenues and equipment, employee income cards and a list of fixed assets. Importantly, this tax is calculated as a percentage of the revenue associated with the sale of goods and services.