One of the most consistently challenging aspects of contracting in Poland is complying with the country’s tax system. As well as paying tax in Poland, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
If you’re working in Poland under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Poland for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Poland, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Poland through PAYE is left with the prospect doing everything themselves.
Do you know much about Polish Tax Law? Does Poland have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Poland can range from 18 to 32 percent, and you need to be sure you are placed in the correct tax brackets.
If you are a contractor and want a calculation on your tax and net retention in Poland, we can supply it to you free of charge.
Contractors in Poland are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Polish umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Polish taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Polish tax office or tax department directly including processing your tax refund if you are eligible.
We work with numerous umbrella companies in Poland, many of whom are experts in tax and immigration laws. If you have any questions about tax in Poland, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Polish work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Poland but without the overhead of directly dealing with the Polish tax authorities. Get in touch with us today for some reliable advice on tax in Poland!
Step 1: Prepare Documents
Collect a PIT-11 form from your employer before 28 February.
Step 2: Fill a PIT-37 Form
Employees in Poland are generally required to fill out a PIT-37 form, using details on your PIT-11 form. You can do this via e-Deklaracje, an official program provided by the Ministry of Finance, or use pre-filled tax return forms here.
Pre-filled tax return forms are easier, but are not available until March.
For a comprehensive step-by-step guide (with English translations) on how to use the 2 programs, click the links below:
Before using pre-filled tax return forms, you must register here.
Step 3: Submit Forms by 30 April
Forms should be submitted to the office designated for the area that you lived in until the last day (31 December) of the previous tax year.
You may submit online or in person at the designated office. It is recommended that you go to the office if you expect to receive a tax refund. If you have received tax refunds previously, the tax office should have your bank account details in their database.
If this is your first time receiving a tax refund and you have a PESEL, you need to fill out a ZAP-3 form which can be found here or at the tax office.
Upon entering Poland, you may have applied for a NIP (numer identyfikacji podatkowej). If you filled out section D1 of the NIP-7 form which required your bank account number, you may submit your forms online. If not, you need to fill out a NIP-7 form at the tax office, providing your bank account details.
When will you receive your refund?
A refund will be paid to you within 90 days, in March or April.
PAYE instalments: Tax is withheld monthly as advance payments for personal income tax. A final calculation of an individual’s annual tax liability is made at the time of preparing the tax return. Depending on the final calculation, the individual may ne required to pay some additional tax, or may be entitled to a tax refund (if advance payments exceed the final tax liability).
Residents and non-residents working under an employment contract with a Polish employer, are subject to withholding tax. The tax withheld by the employer is paid to the tax office by the 20th of the month following the month in which the tax was withheld.
Joint Taxation: Married taxpayers may file jointly. This is cost-effective if their incomes fall under different tax bands. Income is calculated separately, applying their respective tax concessions. Their joint income is divided by 2, and tax is calculated for each spouse.
For this to apply, both individuals must reside in Poland for at least 183 days in the given year, they must have a common marital estate and be married for the entire year for which the PIT form is filled.
Deductible cost of earning income: Taxpayers are entitled to a deductible cost of earning income at PLN111.25 per month.
You become a tax resident in Poland if:
- Poland is your centre of vital interests i.e. you have closer personal or economic relations with Poland; or
- You stay in Poland for more than 183 days in a fiscal year. This is counted over the course of the whole year and includes days before the start date for any assignments.
Yes, if you are a resident.
Non-residents are only taxed on Polish-sourced income.