Significant Tax Benefits in Poland

Everyone wants tax benefits although the procedures for submitting an annual tax return are becoming more straightforward each year, not everyone is aware of the tax deductions provided. We provide some instances of the tax benefits:

What is Important in Tax Benefits:

Pro-family allowance – the most popular of the funding, is the one granted to a child up to the age of 18 or 26 if they are still learning.
The Tax-Deductible Amount is:
– PLN 92.67 for the first and second child (for the entire year PLN 1,112.04 for each child),
– PLN 166.67 for the third child (for the entire year PLN 2,000.04),
– PLN 225.00 for the fourth and each following child (for the entire year PLN 2,700.00 per child).

Tax benefits for the ones working abroad – this relief is available to people who worked in a country to which the agreement on proportional tax deduction applies.
The abolition allowance will be available to all taxpayers, however, the amount deducted from income tax may not exceed PLN 1,360. In practice, this means that anyone who earns an income of PLN 8,000, will have to pay 17% tax in Poland, and after exceeding PLN 85,528 – 32%.

Internet – The discount in the case of the Internet is limited. The maximum deduction of the taxpayer throughout the year cannot exceed PLN 760. The deduction is applied provided that you have documents confirming that they were incurred, e.g. invoices.

Discount on drugs – it is available only to disabled people or taxpayers who have dependents of disabled people. The benefit is only valid if certain medications are prescribed by a specialist doctor. The relief relates to the difference between the expenses incurred in a given month and the amount of PLN 100.

Benefit for young people – also referred to as “no PIT for young people” or “zero PIT for young people”, exempts from the income tax of people up to the age of 26, accepted from employment (and related relationships), and with contracts up to the limit PLN 85,528 per year.

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.