Solidarity levy - the most important information
In 2019, a solidarity levy was introduced in Poland. It taxes the income obtained by taxpayers in excess of PLN 1 million, and transfers the collected tax to the Solidarity Fund for Support of Disabled Persons. Let's check what exactly is a solidarity levy and who has to pay it.
A tribute to solidarity - the most important information
The solidarity levy is a new public benefit, which was introduced along with the Act on the Solidarity Fund for the Support of Disabled Persons. Its operation is regulated by chapter 6a devoted to it "Tribute of Solidarity"In the PIT Act. The solidarity levy has been in force since January 1, 2019 and is subject to income earned from that date.
By whom should the solidarity levy be paid?
Natural persons who obtain income (income - costs) subject to taxation with personal income tax are obliged to pay the solidarity levy, that is:
- income taxed according to the tax scale, incl. from work, retirement pension, business activity or management contracts, on which the tax is calculated in the annual tax return - PIT-40A, PIT-36, PIT-37 with progression),
- income from certain capital gains incl. from the sale of securities against payment, the exercise of the rights arising therefrom or derivative financial instruments, on which the tax due is calculated according to 19% rate in the PIT-38 annual tax return,
- income from economic activity and from special departments of agricultural production taxed according to a flat tax (according to the 19% rate) in the annual PIT-36L tax return,
- income from a foreign controlled unit, on which the tax due is calculated at the rate of 19% in the PIT-CFC tax return,
and the total sum of these incomes after reducing them by the decreasing amounts exceeds PLN 1 million.
Solidarity levy - tax base
The above-mentioned income is taxed with the solidarity levy, and more precisely - the surplus of this income over the amount of 1 million. This means that in order to calculate the tax base with the solidarity levy, the value of the income shown in the tax returns should be summed up - PIT-40A, PIT-36, PIT-36L, PIT-37, PIT-38 and PIT-CFC, for which the deadline for submission expires later than April 30 of the calendar year and not earlier than May 1 of the previous year.
Exceptionally, in 2019, income from the beginning of 2019 will be calculated, shown in the above-mentioned testimonies, provided that the deadline for submitting these forms expires in the period from January 1, 2019 to April 30, 2020. The exception to the above rule is the income shown in PIT-40A. They are taken into account only when the tax resulting from this settlement is due tax, i.e. when the taxpayer does not submit a return on his own, taking into account the data from this form. As a rule, this happens when the taxpayer has not received income from another source. The surplus of over PLN 1 million in the sum of the above-mentioned income, after reducing it by the amounts that reduce this income, is the basis for calculating the solidarity levy. The amounts reducing this income should be understood as:
- the amount of social security contributions (domestic and foreign),
- the amount included in the tax base of the taxpayer, the dividend received from a foreign controlled entity and income from the disposal of a share in a foreign controlled entity, in part included in its tax base.
The basis for calculating the solidarity levy should be rounded to full zlotys - endings of amounts of less than 50 groszy are omitted, and endings of amounts of 50 grosz or more are increased to full zlotys. It should be noted that when determining the basis for calculating the levy, it is not important that the taxpayer has made a settlement with the spouse (it does not combine them with the spouse's income, nor does it divide it in two).
In 2020, Mr. Waldemar achieved income from business activity subject to flat tax and from an employment contract. Therefore, he is required to submit two annual tax returns in PIT-36L and PIT-37. When determining the tax base of the solidarity levy, he should take into account the income from both tax returns.
Mr. Sebastian settled with his spouse for PIT-37. In this testimony, only Mr. Sebastian showed income in excess of PLN 1 million (after deducting social contributions). Apart from the income shown in PIT-37, the spouses did not obtain any other income. Despite the fact that Mr. Sebastian settles accounts together with his wife, only he will be obliged to pay the solidarity levy.
Mr. Jacek, on February 15, 2020, submits a PIT-36 tax return for 2019. Then, on March 31, 2021, in connection with leaving Poland, he submits a PIT-37 tax return for 2020. When determining the basis for calculating the tribute for 2021, the income from both statements should not be taken into account, because the deadlines for their submission (for both) do not fall between May 1, 2020 and April 30, 2021.
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The amount of the solidarity levy
The solidarity levy is paid at a rate of 4% of the basis for its calculation. If the tax amount is determined by taking into account the income obtained from sources of income located abroad, the tax is reduced proportionally by the amount equal to the tax paid on this income abroad, in accordance with the provisions of the agreements on the avoidance of double taxation concluded by Poland. The amount of the tax paid abroad is subject to deduction from the solidarity tax, in the part exceeding the amount of the tax deducted in accordance with Art. 27 sec. 9 and 9a, art. 30b paragraph. 5a, 5b, 5e and 5f or article. 30 c of paragraph 1. 4 and 5 of the PIT Act.
Ms Sylwia has earned income from Switzerland, to which, according to the provisions of the treaty on avoidance of double taxation, the exemption with progression method applies. Since the exemption with progression method applies to the income earned, it is not included in the calculation of the solidarity tax.
Ms Elżbieta's business activity was taxed with the tax scale in 2019 and earned an income of PLN 1,420,000. Therefore, it will be required to pay a solidarity levy in the amount of PLN 16,800.
PLN 1,420,000 - PLN 1,000,000 = PLN 420,000
PLN 420,000 * 4% = PLN 16,800
Deadline for payment of the solidarity levy
The payment of the solidarity levy takes place by 30 April of the calendar year. If the levy is not paid on time, tax interest will be charged on this account on the amount that has not been repaid on time.
The solidarity levy shall be paid to the account of the tax office competent in matters of income tax for natural persons, included in the list of bank accounts of the tax offices. Therefore, the solidarity levy will not be paid to the tax micro-account. The head of the tax office is obliged to transfer the amount paid as a solidarity levy to the bank account of the Solidarity Fund for Support of Disabled Persons. The solidarity levy is a source of income for this fund.
A solidarity levy - is it a tax cost?
The amount of the solidarity levy paid does not constitute a tax deductible cost in the personal income tax. Pursuant to Art. 23 sec. 1 point 66 of the PIT Act "the following are not considered to be tax deductible costs: the solidarity levy referred to in chapter 6a ".
Declaration on the amount of the solidarity levy
Taxpayers who are obliged to pay the solidarity levy must additionally submit a declaration of its amount on the DSF-1 form by April 30 of the calendar year. It is submitted in paper or electronic form to the competent tax office. In the case of natural persons:
- residing in the territory of the Republic of Poland - the competent office is the tax office established according to the place of residence of a natural person on the last day of the tax year, and when residence in the territory of the Republic of Poland ceased before that date, the tax office established according to the last place of residence in its territory,
- who have no place of residence in the territory of the Republic of Poland - the competent office is the tax office in matters of taxation of foreign persons. The DSF-1 declaration contains the data necessary for the correct identification of a natural person, the tax office to which it should be addressed and the data necessary for the correct settlement of the solidarity levy. The declaration can be submitted in an electronic version via the e-declarations service. However, it will not be prepared by officials in the Your e-PIT service.