On 12 May 2022 the Sejm enacted legislation that changes the Personal Income Tax Act and certain other acts (“Bill”). On 13 May 2022 the Bill was transmitted to the Senate for further procedures.
Below are the most important of the changes introduced by the Bill:
- PIT rate will be reduced from 17% to 12% within the up to PLN 120K income bracket (including for businesses);
- health insurance contributions will again become deductible from income up to a certain limit – for businesses with flat-rate taxation the limit will be PLN 8.7K, for taxpayers with single-rate taxation (ryczałt) the limit will be 50% of the contributions paid, while persons paying sliding-scale tax will not be able to use the deduction;
- the middle class relief will be scrapped but with a guaranteed option for taxpayers to be able to apply it in their annual return if they think it is the better option after the tax office has computed their “hypothetical tax due”;
- the historical monuments relief scheme will be tightened;
- the equalization relief (abolicja podatkowa) will be scrapped;
- persons with several sources of income will be able to have up to three of their employers apply the tax-free amount at the same time when calculating their advance tax payments (with the tax being reduced as personal allowance by PLN 300 for one contract, by PLN 150 for two contracts and PLN 100 for three contracts), plus personal allowance will be used for incomes earned under contracts for services (this change will take effect on 1 January 2023);
- there will be no duty to compute advance tax payments in 2022 according to both 2021 rules and 2022 rules in parallel;
- joint taxation option will return for a single parent and their child (instead of the PLN 1500 relief introduced as of 2022), with the tax-free amount being available for each of the parent and the child separately;
- an increase to PLN 16,061.28 (two times the amount of the renta socjalna welfare benefit) of the child earnings cap beyond which the parents lose their tax privileges;
- time to submit JPK_CIT and JPK_PIT will be extended until 2025 for most taxpayers.
Generally, the PIT amendments introduced by the Bill will take effect on 1 July 2022 but the Bill also contains a number of transitional provisions which allow some of the new regulations to apply to income derived already from 1 January 2022.
We will keep you updated on the progress of this legislation.
If thiss issue pertains to your business and you are interested in our assistance, please contact us.
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