Tax relief for return means several thousand PLN of savings per year
The “Polish Deal” proposes the introduction of a new personal income tax allowance to encourage Poles (but not only!) living abroad to return to the country. Taking advantage of it will entail significant savings.
This preference, called the tax return for relief, will be available to persons who have not had a tax residence in Poland for at least 3 full calendar years and who decide to change their tax residence to Poland.
If all the conditions for the application of the tax relief are fulfilled, the revenues from the service relationship, employment relationship, outwork relationship or co-operative employment relationship and revenues from non-agricultural business activity will be tax-free, however, the sum of the revenues exempted from taxation cannot exceed PLN 85,528 per year. Incomes above this amount will be taxed according to general rules.
The taxpayer will be able to take advantage of the exemption only once, but for four consecutive years. This means that if after taking advantage of the discussed preference, e.g. in two consecutive years, he moves his place of residence out of the country, upon his return he will no longer be entitled to continue the relief.
The taxpayer will be able to take advantage of the exemption only once, but for four consecutive years. This means that if after taking advantage of the discussed preference, e.g. in two consecutive years, he moves his place of residence out of the country, upon his return he will no longer be entitled to continue the relief.
Significant savings
Additional requirements implemented by the legislator include in particular the condition of holding Polish citizenship, citizenship of a member state of the EU, EEA or Switzerland, or possession the Card of the Pole. However, this condition will not apply to taxpayers who, for at least 3 full calendar years before moving their residence to Poland, resided in the territory of the EU, EEA, Switzerland, Australia, Chile, Israel, Japan, Canada, Mexico, New Zealand, South Korea, Great Britain and Northern Ireland or, before moving their residence outside Poland for at least 3 years, resided in our country for at least 5 calendar years. In practice this means that some foreigners will also be able to take advantage of the relief.
It is worth noting that the fact of having a residence outside Poland may be confirmed by a certificate of residence or other documents: certificates, documentation related to employment or registration.
In case of persons considering transferring their tax residence to Poland, the proposed solution will undoubtedly be a factor facilitating their decision, as taking advantage of the relief will entail significant savings, amounting to – depending on the taxpayer’s source of income – at least several thousand PLN.
Author: Katarzyna Jessa, Barrister, Mediator