With increasing numbers of UK citizens living, working, or investing in Poland, understanding tax obligations is essential. Whether you are relocating, purchasing property, or doing business in Poland, knowing when and how you might be taxed is crucial to avoiding legal and financial complications. Here’s a comprehensive guide to UK citizens’ tax responsibilities in Poland.
1. Determining Tax Residency in Poland
Polish tax obligations primarily depend on tax residency status. You are considered a Polish tax resident if you meet either of the following criteria:
You spend more than 183 days in Poland within a tax year.
Your center of vital interests (economic or personal ties) is in Poland.
If you are classified as a Polish tax resident, you are subject to unlimited tax liability, meaning you must pay taxes on your worldwide income in Poland. If you are a non-resident, you are only taxed on income earned within Poland.
Establishing Residency for Tax Purposes
Residency status is crucial because it determines your tax liability. The Polish tax office may evaluate factors such as:
Location of your primary home.
Employment status and location of employer.
Family ties and where your dependents reside.
Business or economic activity in Poland.
It is recommended to obtain a certificate of tax residency if you wish to clarify your tax status and avoid potential disputes.
2. Key Taxes Applicable to UK Citizens in Poland
a) Personal Income Tax (PIT)
Personal income tax (PIT) in Poland is progressive and applied at the following rates:
12% on income up to 120,000 PLN per year.
32% on income exceeding 120,000 PLN per year.
Certain sources of income, such as capital gains, are subject to a 19% flat tax. Additionally, social security contributions may apply if you work in Poland.
b) Corporate Tax (CIT)
If you run a business in Poland, corporate income tax applies at the following rates:
19% standard rate.
9% reduced rate for small businesses with annual revenue below 2 million EUR.
Foreigners running businesses in Poland should ensure compliance with company registration and tax filing requirements.
c) Value Added Tax (VAT)
If you provide goods or services in Poland, you may be subject to VAT, typically at 23%. Lower rates (5% or 8%) apply to certain products and services. Businesses exceeding 200,000 PLN in annual revenue must register for VAT.
3. Double Taxation Agreement Between the UK and Poland
The UK-Poland Double Taxation Agreement (DTA) prevents UK citizens from being taxed on the same income in both countries. This treaty allows:
Tax relief or exemption in one country if tax has already been paid in the other.
Tax credits for UK citizens paying taxes in Poland on income sourced from the UK.
Guidelines on which country has primary taxing rights over different income types (e.g., pensions, salaries, dividends).
UK citizens should check whether their income qualifies for relief under the agreement and file relevant tax forms with both UK and Polish authorities.
4. Tax Obligations for UK Pensioners in Poland
UK citizens receiving state pensions or private pensions while living in Poland should be aware of the following:
UK state pensions are usually taxable only in the UK.
Private and occupational pensions may be taxed in Poland, depending on the DTA.
UK citizens may need to submit tax declarations to Polish authorities to comply with local regulations.
Pensioners should also be aware of Poland’s healthcare contributions and social security deductions that may apply.
5. Property Tax and Capital Gains
If you own property in Poland as a UK citizen:
Rental income from Polish property is taxable in Poland at 8.5% or 12.5%.
Capital gains tax (19%) applies if you sell property within 5 years of purchase.
Annual property tax may apply based on location and property size.
It is advisable to maintain accurate records of property transactions and expenses to optimize tax deductions.
6. Filing a Tax Return in Poland
If required to file a tax return in Poland:
The tax year runs from January 1 to December 31.
Tax returns are due by April 30 of the following year.
You can file your tax return electronically via the Polish tax office’s website.
Late filings may result in penalties and interest charges.
UK citizens should consider seeking professional tax advice to ensure compliance with Polish tax regulations and take advantage of available deductions.
7. Common Tax Deductions and Reliefs in Poland
Poland offers several tax relief options, including:
Child tax relief for parents supporting children.
Mortgage interest deductions for first-time home buyers.
Business expense deductions for self-employed individuals.
Foreign tax credits for taxes paid in the UK under the DTA.
Taking advantage of these deductions can help minimize your overall tax burden.
8. How Can Consul Law Firm Help?
At Consul Law Firm, we assist UK citizens in navigating Polish tax laws. Whether you need help with tax residency determination, filing returns, or understanding double taxation relief, our expert legal team is here to guide you.
Our services include:
Tax planning and optimization to minimize liabilities.
Residency and compliance advisory to ensure legal security.
Assistance with tax filings and official documentation.
Representation in tax disputes with Polish authorities.
For professional tax advice tailored to your situation, contact Consul Law Firm today and ensure you remain compliant with Polish tax regulations.
