The system of taxation in Poland is similar to other EU countries.
There are three main taxes: value added tax, corporate income tax, personal income tax.

Value added tax

The basic rate is 22% (an increase to 23% is planned in 2011). The regulations are based on EU directives, so main principles are similar to those existing in other EU countries. Generally the tax shall be transparent for entrepreneurs, but there are some limitations in deduction of VAT paid – personal cars (partial deduction up to 60%, no more than 6,000 PLN is allowed), fuel used to power them, hotels, and restaurants.

Corporate income tax

The basic rate of the tax is 19%. It is the only income tax related to the economic activity. It is payable to the state budget. It is shared with local authorities based on other regulations. Poland implemented regulations that eliminate double taxation in case of dividend payments from one company to the other one – when certain conditions have been fulfilled the revenues from dividends are free from income tax.

Personal income tax

The basic rates are 18/32%. Personal income tax is applicable also for individuals running economic activity as sole entrepreneurs or partners of partnerships. They have got an additional possibility to pay flat 19% rate tax, similarly to bigger companies.

The income tax rate on interests and capital gains is 19%.

Other taxes and charges

There is a number of other taxes that may be applicable depending on the activity of the entrepreneur – the most important are excise duty, real estate tax, transportation means tax, civil law transaction tax as well as social security contribution, charges on using the environment, recycling of electronic and electric products, contribution for the fund of supporting disabled people and others.

It is always worth  considering  consultancy with a tax advisor to review the taxes and charges that may be applicable and how to pay them in the best way.

Author: Tomasz Wikliński, THOMAS sp. z o.o., www.thomas.pl

Official name: Republic of Poland
Population: 38,463,689
Area: 322,575 km²
Official language: Polish
Currency: Polish Zloty (PLN)
Capital city: Warsaw
GDP Per Capita – purchasing power parity : 18,072 USD

Poland is located in Central Europe at the Baltic Sea. It borders on Germany (in the West), Czech Republic, Slovakia (in the South), Ukraine, Belarus (in the East), Lithuania (in the North-East) and Russia (Kaliningrad district – in the North). By area it is the 68th country in the world and 9th in Europe. Poland is divided in 16 voivodships. The main river is Vistula that flows from the mountains in the South to the Baltic Sea.

Poland is a homeland for many persons known worldwide : Nicolaus Copernicus – an astronomer that “stopped the Earth and made Sun moving”, John Paul II – the Pope, Lech Walesa – that played an important role in changing the political system of the countries in Eastern Europe, Frederic Chopin – a composer, many scientists, travelers, soldiers fighting for independency of Poland and other countries.

The history of Poland reaches the year 966 when Mieszko I, the first ruler, accepted Christianity. Poland became a kingdom in 1025 and entered into a Commonwealth with Lithuania.  During the majority of its history Poland was independent, multiethnic and multireligious.  

In 1795 Poland was divided between three invaders: Kingdom of Prussia, Russia and Austria. It regained the independency in 1918 after the First World War. During the Second World War it was occupied by The Third Reich and Soviet Union. After the war Poland became a socialist republic, politically and economically dependent on the Soviet Union. In 1989 the political system was changed and it became a parliamentary democracy. After very difficult reforms in the early nineties it returned to a market economy. Poland is a member of the European Union since 2004.
Poland is a fast developing country. The GDP in 2009 reached the level of 1,7% and it was the only positive number in the EU (average – minus 4,1%). The economy is mixed in terms of ownership. 25% of GDP is generated by state-owned-companies, what is a level similar to France and Norway. It is an attractive place for investments – good geographical location, internal stability, participation in the EU. It is however not ideal – unclear law, significant bureaucracy, high administration charges, not enough developed infrastructure and high unemployment are the most important problems for the entire society.

Author: Tomasz Wikliński, THOMAS sp. z o.o., www.thomas.pl

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