We are pursuing a responsible budgetary policy. Our country’s public finances are stable. Owing to introduced solutions for tightening of the tax system, we are seeing a constant increase in budget revenue. Between 2015 and 2020, revenue from VAT increased by over PLN 93 billion. Increases were also observed with respect to revenue from corporate income tax (CIT), which increased by PLN 27 billion, and revenue from personal income tax (PIT), which saw an increase of approx. PLN 29 billion (excluding Local Government Units).

We share the increased state budget revenue with the Poles. We want more money in the wallets of Polish citizens. We want to mitigate the economic effects of inflation and the Russian aggression against Ukraine as much as possible.

“First a pandemic, and now a war. Economists call such a chain of events a ‘perfect storm’. And these factors do, in fact, have a serious effect on our economy. We can, and should, be honest and say that we are living in difficult times, and may be facing even more difficult times,” stated Prime Minister Mateusz Morawiecki. The Head of the Government added that more components of the so-called “Anti-Putin Shield” are being prepared for these difficult times. The Shield is meant to protect, at least partially, Polish citizens, Polish families – especially the most vulnerable ones – from the effects of war, which, while atrocious in Ukraine, are also highly unfavourable for Poland and for the rest of Europe, as they primarily entail higher prices.

New tax solutions provide support for Polish citizens

The entire world is struggling with inflation. We are striving to limit this negative phenomenon in our country as much as possible. We are introducing more beneficial tax changes to help the Poles in these difficult times. What will change?

The personal income tax (PIT) rate will be reduced from 17 percent to 12 percent

• Lower tax rate on income up to PLN 120 thousand. This means that tax will be lowered by 5 percentage points, i.e. by nearly 1/3,
• Applies to taxpayers taxed under the progressive tax regime: pensioners, employees, contractors, entrepreneurs,
• The change will benefit 25 million taxpayers,
• Number of taxpayers taxed under the progressive tax regime who pay no tax: nearly 6.7 million in 2021, nearly 15.2 million once the changes are introduced on 1 July 2022.

This is yet another personal income tax (PIT) reduction in recent years; 2.5 years ago, the Government decided to reduce tax rate from 18 percent to 17 percent.

Healthcare contributions will be excluded from taxable amount

• Applies to entrepreneurs taxed under the flat-rate tax, lump-sum tax or tax card regimes,
• The change will benefit 14 million taxpayers.

More favourable rules for applying tax-exempt amount to tax advances for those who work multiple jobs

• The rules under which withholding agents apply tax-exempt amount to advances towards personal income tax (PIT) will be changed,
• If several contracts converge, the taxpayer will be able to authorise up to 3 withholding agents (employers, principals, the Social Insurance Institution) to reduce advance payments towards personal income tax (PIT) (PLN 3,600),
• PLN 300 for one contract, 2 times PLN 150 for two contracts and 3 times PLN 100 for three contracts.

More favourable rules for applying tax-exempt amount to tax advances for those who file PIT-2 forms

• A uniform system for calculating advance payments will be introduced,
• Withholding agent’s remuneration will be increased,
• The role of the withholding agent in the process of filing PIT-2 forms by employees will be increased.

Single parents will once more be able to file a joint tax return together with their child

• We are responding to demands voiced by single parents – they will regain the right to file a joint tax return together with their child – they will be able to apply the tax-exempt amount of PLN 30 thousand twice,
• The right to file a joint tax return will replace the relief for single parents of PLN 1,500.

Tax advantages for parents, guardians and children

• The amount which can be earned by a child without causing their parents to lose tax advantages will be increased from PLN 3,089 to PLN 16,061.28 (12 times the social pension) in 2022,
• Family pensions for minor children will not be included in their parents’ income. The child, as a separate taxpayer, will also be able to take advantage of the tax-exempt amount of PLN 30 thousand,
• Tax reliefs (relief for the young, return relief, 4+ relief for families, relief for working senior citizens) will also cover maternity allowance granted to parents and guardians who take in foster children.

1 percent tax donations for public benefit organisations

• A special mechanism to mitigate the effects of reduced revenue from 1 percent tax donations for the public benefit organisation sector will be introduced,
• If the total amount of funds received from 1 percent personal income tax (PIT) donations by the public benefit organisation sector in a given year is lower compared to 2022, the difference will be compensated.

Stable revenue for local governments

Local governments will be compensated for decreased tax revenue through:

• Increase in development subsidy, or
• Supplementation of general subsidy.

Extended deadline for submission of Standard Audit Files for corporate income tax (CIT) and personal income tax (PIT)

• We are responding to demands voiced by accountants and entrepreneurs and extending the deadline for submission of Standard Audit Files for corporate income tax (CIT) and personal income tax (PIT),
• The new deadline is 2025.

We are commencing large-scale consultations and adjustments

We are commencing consultations concerning the new tax solutions; we are open to opinions and suggestions. The draft will be consulted with, among others:

• the Social Dialogue Council,
• the Accountants Association in Poland,
• the National Chamber of Tax Advisers,
• representatives of entrepreneurs, including the Ombudsman for SMEs.

More solutions under the so-called “Anti-Putin Shield”

Tax changes constitute further beneficial solutions under the so-called “Anti-Putin Shield”. Last week, Prime Minister Mateusz Morawiecki presented the first assumptions of the package of changes:

• Support for farmers – subsidies for mineral fertilisers

Support will be aimed at farmers who are at risk of losing financial liquidity. Agricultural producers will be eligible to receive state budget subsidies for fertilisers purchased between 1 September 2021 and 15 May 2022.

Subsidies will cover a maximum surface area of 50 ha. What will be the limits? PLN 500 per 1 ha of growing crops and PLN 250 per 1 ha of meadows, pastures and grass on arable land.

• Protective shield against uncontrolled gas price increase

Tariff protection will cover 7 million households, tenants’ associations and housing cooperatives as well as public service entities, such as hospitals and schools. It will limit the risk of a sudden price increase and leave more money in the wallets of Polish citizens.

More information can be found here.

The Prime Minister announced that further beneficial solutions will be introduced: “In Poland, we will be doing everything we can to mitigate the effects of this war and ensure that subsequent versions of the Anti-Putin Shield provide some respite for the Poles during the difficult times ahead.”