The Polish Order signed by the President – the most significant changes

The most significant changes introduced by the Act include:

1. an increase in the personal income tax allowance to PLN 30,000;
2. an increase to PLN 120,000 of the threshold above which the personal income tax rate of 32% applies;
3. the extension of the list of personal income tax exemptions to include specific types of income, including income of a taxpayer who has moved their place of residence to the territory of the Republic of Poland, income of a taxpayer who, during the tax year, exercised parental authority over at least four children or acted as a legal guardian, if the child lived with them, or acted as a foster family, and income received by a taxpayer after reaching the age of 60 in the case of women and 65 in the case of men, who, despite having acquired pension rights, do not make use of them;
4. the introduction of the so-called middle-class tax relief;
5. replacing the right of a taxpayer who is a single parent to be taxed jointly with their child with the option for such a person to deduct PLN 1,500 from their tax liability;
6. maintaining the taxation of income from letting, subletting, leasing, subleasing and other similar agreements, provided that such agreements are not entered into as part of non-agricultural business activities exclusively in the form of a lump-sum tax on recorded income;
7. abolishing the right of personal income tax payers and corporate income tax payers to include depreciation write-offs on fixed assets and intangible assets, which are respectively residential buildings, residential premises constituting a separate property, co-operative ownership rights to a residential unit and rights to a single-family house within a housing co-operative;
8. a change in the rules for determining the amount of the health insurance contribution;
9. the abolition of the taxpayer’s right to deduct the amount of health insurance contributions paid (collected by the payer) in the tax year from the amount of personal income tax due for that year or from the flat-rate income tax on certain income earned by individuals;
10. the introduction of a minimum income tax (for corporations) at a rate of 10% of the tax base;
11. establishing rules for the taxation of holding companies;
12. the introduction of the institution of temporary seizure of real estate;
13. the introduction of the institution of an investment agreement;
14. introducing a rule that taxation in the form of a tax card will apply only to those taxpayers who continue to use this form of taxation after 31 December 2021 and who have not opted out of this form of taxation after that date and have not lost the right to be taxed in this form after that date;
15. establishment of rules for taxation within a VAT group;
16. imposing an obligation on the consumer to make payments via a payment account if the value of a single transaction with a trader, regardless of the number of payments arising from it, exceeds PLN 20,000;
17. introducing the institution of the verifying purchaser;
18. the introduction of a tax amnesty for personal income tax payers, corporate income tax payers and payers of the flat-rate income tax on certain income earned by individuals, through the introduction of a transitional flat-rate tax on income amounting to 8% of the tax base.