Belka tax – do you know how much you’re really paying in capital gains?

Initially, the tax rate stood at 20% and applied only to savings held in bank deposits and fixed-term accounts. In 2004, its scope was significantly expanded and the rate was reduced by 1 percentage point to the current 19%.

The Belka tax applies to millions of Poles. Revenue to the state budget from this source reached a record PLN 9.069 billion in 2023.

We pay this tax on capital gains:

• From bank savings and deposits
• From securities
• From bonds
• From equity funds
• From dividends
• From interest on loans;
• From amounts paid out following the death of a member of an open pension fund
• In respect of the transfer of shares from a quantitative account to an occupational pension fund;
• From the sale of share subscription rights by an occupational pension fund;
• Income from the repayment of funds accumulated in an individual pension account;
• Income from the return of funds accumulated under an occupational pension scheme;
• In respect of insurance contracts

The tax base is the income, which in most cases cannot be reduced by the costs of obtaining it. The Belka tax is one of the simpler taxes; regardless of the amount of capital income, every taxpayer pays the same rate. It is not subject to progressive taxation, tax reliefs or tax-free allowances. The lack of progression is sometimes criticised because those earning little from their savings must pay the same rate as those earning significantly more. The tax rate is also not determined by the duration of the investment. This tax also applies to individuals earning income abroad.

In most cases, the tax is deducted automatically by banks or other financial institutions following each capitalisation. However, taxpayers who invest on the stock market themselves must declare their profits using the PIT-38 form.

How can you avoid paying Belka tax?

Avoiding Belka tax is a difficult task, as the legislator has made every effort to ensure the system is as watertight as possible.

One of the best ways is to use an Individual Pension Account or an Individual Pension Security Account. Savings accumulated in these accounts will not be subject to Belka Tax if they are held there for a sufficiently long period.

The Belka Tax also does not apply to property-related investments, which is an alternative option for those wishing to invest their savings in a different way.

Are changes possible?

Supporters of the tax argue that it is fair because it taxes those who earn money on the stock market in the same way that income tax is levied on those in employment. Some experts claim that this tax discourages Poles from saving and investing, particularly during periods of high inflation when the real return on deposits and financial instruments is limited. Revenue from the Belka Tax does not constitute a significant percentage of the state’s total income. During the election campaign, the new government promised changes to the Belka Tax that would provide relief for Poles. The Ministry of Finance had announced that changes would be introduced as early as 1 January 2025; however, the draft budget bill for next year does not include any potential adjustments to this tax. The Minister of Finance claims that specific plans and proposals are already in place. At the same time, the Ministry emphasises that there is no scope for tax cuts in Poland.