Tax changes from the Polish Order have entered into force. The tax-free amount increased to PLN 30,000, and the tax threshold to PLN 120,000. At the same time, the deduction of health insurance contributions from tax disappears.
Free amount and tax threshold
One of the elements of the Polish Governance is the increase in the tax-free amount. It applies only to taxpayers who settle income shown on PIT-36 or PIT-37 taxed according to the tax scale, i.e. for example people employed full-time or on the basis of a mandate contract. From 2009, the tax-free amount was PLN 3,091. Later, from 2017, the highest possible free amount increased to PLN 6,600, and from 2019 it was PLN 8,000. In practice, it remained at the 2009 level for most taxpayers. From 2022, the tax-free amount will be PLN 30,000 per month, and the tax-reducing amount will be PLN 425 per month.
For the first time in 12 years, the tax threshold was also raised from PLN 85,528 to PLN 120,000. After the changes, incomes covered by 32 percent. the tax rate will apply only to those obtained in excess of PLN 120,000. As a result, for every zloty from the amount of 120 thousand. PLN, the tax will be 32 groszy, and on that above 85 thousand. up to 120 thousand – 17 groszy instead of the previous 32.
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Health care contribution
At the same time, the government also introduced changes to the provisions on health insurance, which means that the changes to the Polish Deal in the end become less favorable for the taxpayer. Currently, the health insurance premium is 9 percent. salary (after deducting the amount of contributions for retirement, disability and sickness insurance), but 7.75%. part of the contribution is tax deductible. The Act abolishes this deduction.
Entrepreneurs will have to calculate it on the basis of income or income depending on the adopted form of taxation. The monthly health contribution as part of the tax scale will be 9 percent. income, but not less than PLN 270.90. In the case of the flat tax, it will be 4.9%. income, but not less than PLN 270.90. Those settling the tax card will have to pay just PLN 270.90 per month. The health insurance premium will depend on the amount of revenues obtained in the case of entrepreneurs paying a lump sum on registered revenues.
Read also: Polish Order and Big Changes for Entrepreneurs. What you need to know
A relief for the middle class
The Tax Act of the Polish Order introduced the so-called middle class relief. It is to concern, inter alia, full-time employees achieving annual revenues from employment contracts in the range from PLN 68,412 to PLN 133,692. Thanks to this – as previously assured by the Ministry of Finance in the regulatory impact assessment – the reform is to be neutral for taxpayers with income ranging from PLN 6,000 to PLN 11,000 per month. In principle, the tax relief is to limit the negative effects of changes in the health insurance contribution for employees from this income group.
The governmental salary calculator for an employment contract after the introduction of tax changes from the Polish Order shows that the most, PLN 154 per month, will be earned by people earning the lowest national income – from January it will be PLN 3010 gross per month. According to estimates, people earning PLN 15,000 gross will lose over PLN 163 a month. In the case of even higher earnings, the loss grows – up to several thousand zlotys a month.
In the case of entrepreneurs, the relief will only apply to those who pay according to the tax scale. The solution will cover entrepreneurs who earn up to 13 thousand. zloty.
Relief for a pensioner
Another change that comes into force on January 1 is the so-called PIT-0 for a pensioner – in fact, it is a PIT relief, which applies to people employed on a full-time basis or working on orders, who, despite reaching the right to retirement, will withdraw from receiving it and will continue professionally active.
Working seniors who will not receive a retirement pension will pay the tax if their earnings exceed PLN 115,528. This amount consists of 30 thousand. PLN of the free amount and PLN 85 528 of the relief.
Read also: Polish Order in Pensions. Up to 600,000 people may lose during the shifts
PIT relief for parents
A novelty is also a relief for parents with at least 4 children. The solution will cover them, regardless of whether they are employed full-time, whether they are entrepreneurs on a tax scale, flat tax and lump sum tax, whether they raise children together or are single parents.
Each of the parents in a family with at least 4 children will receive a deduction of PLN 85,000. PLN, which will increase the free amount of 30 thousand. zloty. This means that a parent who settles accounts on general terms will not pay PIT with an income up to PLN 115,528. In the case of joint settlement of the spouses, the amount without PIT will be PLN 231,056.
The Polish Order has also introduced changes to PIT for single parents. Until now, the settlement with a child who has no income meant that the level from which the second tax threshold started was PLN 171,056 (twice PLN 85,528). Up to this level of income, the whole was covered by 17%. tax rate. In the case of self-settlement, after exceeding the threshold of PLN 85,528, the parent would have to pay 32%. income tax. From 2022, instead of a settlement with a child, there will be a deduction for a child in the amount of PLN 1,500.
As part of the Polish Order, the scope of application of the so-called Estonian CIT, thanks to which the entrepreneur does not pay tax until he decides to pay out from the profit from the company. The new solutions are to be simpler and more attractive than before, especially at the level of the effective tax rate.
Also, the regulations on sponsorship are to become more attractive than those in force before – the limit on deducting expenses for supporting socially useful activities or sports, cultural, and higher education and science activities has increased from 100% on January 1. up to 150 percent
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