Polish Government Considers Gradual Increase of Tax-Free Threshold to PLN 60,000

The Polish Ministry of Finance is actively working on plans to raise the personal income tax (PIT) exemption threshold, to gradually increase it to PLN 60,000—a key electoral promise made by the Civic Coalition ahead of the 2023 parliamentary elections. Currently, the tax-free amount stands at PLN 30,000, a level introduced in 2022 by the previous Law and Justice government as part of the Polish Deal program.

According to the newspaper Fakt, the Finance Ministry is exploring the possibility of raising the threshold by PLN 10,000 annually. Such a phased approach could offer noticeable financial relief, especially to low-income earners and pensioners. While those on minimum wage would still be required to pay some PIT, the tax burden would be lighter than under current rules. Seniors receiving pensions exceeding PLN 2,500 would also benefit. For instance, increasing the threshold to PLN 40,000 could make pensions up to PLN 3,300 per month exempt from PIT, potentially saving recipients around PLN 100 monthly.

Finance Minister Andrzej Domański confirmed on Radio Zet that his ministry is preparing a detailed plan for increasing the tax-free amount, though he noted that completing the plan by the end of the summer holiday would be a “very ambitious” timeline. He also stated that the ministry is considering multiple scenarios for implementation.

Domański responded to recent comments from President-elect Karol Nawrocki, who expressed willingness to sign legislation increasing the tax-free threshold and even initiate legislation if necessary. The minister said the government would consider the president’s proposals in due course.

Public support for the reform is strong. A survey by SW Research for Wprost found that 38% of respondents most regret the coalition’s delay in raising the tax-free threshold – more than any other unfulfilled campaign promise.

What This Means for Businesses in Poland

Tax policy changes in Poland have direct implications for both domestic and foreign-owned businesses. Companies operating in Poland must stay informed about regulatory developments to optimize their tax position and maintain compliance. The Polish tax system includes CIT (19% standard, 9% for small taxpayers), VAT (23% standard rate with reduced rates of 8% and 5%), and various sector-specific levies.

For international entrepreneurs and investors, understanding the Polish tax landscape is essential for business planning. Poland offers several attractive incentives including the Polish Investment Zone (up to 15 years of CIT exemption), R&D tax relief (up to 200% deduction), and the IP Box regime (5% effective CIT rate on qualified intellectual property income). Professional tax advisory can help identify the most beneficial structure for your specific situation.

The interplay between Polish domestic tax law and international tax treaties is particularly important for foreign-owned entities. Transfer pricing regulations, withholding tax provisions, and anti-avoidance rules (GAAR) require careful navigation to ensure both compliance and optimization.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our tax advisory services in Poland, or contact us for a free consultation.