Income taxes part AND

Service-Tax

In the next cycle, the subject of income taxes in Poland will be discussed in detail. These taxes in the Polish legal system have a relatively short history - they were introduced in 1920 as one of the first tax structures throughout the country. For natural persons who do not run a business, they are associated with filling the pita every year, often with considerable problems. In the first article in the series, the essence of income taxes will be explained and their types will be presented.

Characteristics of income taxes in Poland

The principle governing income tax is very simple - if a given person earns money, and thus receives a salary or earns a profit from his / her business, he should pay the tax. As the name suggests, it is a compulsory service provided by a natural or legal person to the state, depending on the income and the calculations used.

This tax is calculated by the taxpayers or payers themselves (most often employers), pension and retirement authorities and entities paying fees. However, the tax offices have the right to verify that it has been calculated correctly and that the correct amount has been paid.

It is a universal tax in terms of entities, as it covers all persons who earn their income in the territory of the country. In the case of this levy, however, it cannot be said that it is objective universality, because the legislator has provided for various types of tax exemptions, depending on the sources of revenues.

In the context of income tax in Poland, the principle of tax equality is also important. This means that all taxpayers earning the same income are treated equally, regardless of whether the income comes from self-employed economic activity, liberal professions, employment, pensions or property rights.

There are two types of income tax in Poland:

  • from natural persons (PIT - personal income tax) - regulated by the Act of July 26, 1991 on personal income tax (consolidated text: Journal of Laws of 2000, No. 14, item 176, as amended; further as: PDOFizU),
  • from legal persons (CIT - corporate incone tax) - regulated by the Act of February 15, 1992 on corporate income tax (consolidated text: Journal of Laws of 2000, No. 54, item 654, as amended; further as: PDOPrU).

In the presented cycle, issues related to personal income tax will be discussed.

The tax office is the tax office. Personal income tax is settled in the office competent for the taxpayer's place of residence, unlike CIT (corporate income tax), for which the competent authority is the tax office assigned to the registered office of the capital company.

Income tax is paid in the form of a monthly or quarterly advance tax. The taxpayer should fulfill this obligation by the 20th day of the following month (or quarter, if it is settled quarterly), so e.g. the tax for May should be paid by June 20. The exception is the tax card - here the settlement takes place by the 7th day of the following month (more on this later in the article).

The concept of income and revenue

Due to the fact that the tax in question is a tax on earned income, it is very important to distinguish between two, often confused concepts - income and income.

Income (and therefore the inflows that lead to income) is money and cash values ​​received or made available to the taxpayer in a calendar year, as well as the value of benefits in kind and other gratuitous benefits received. This is the statutory definition. To put it simply, income is earnings (both in money and in kind) and the money you earn (money). Tax is, by definition, paid on what we have already received. But there are certain exceptions to this rule - revenues are also amounts due (and not only received) from:

  • non-agricultural business activity,
  • from special departments of agricultural production,
  • from cash capital,
  • from the sale of shares in companies having legal personality,
  • from the sale of securities for consideration and from the exercise of the rights arising from them,
  • due to the nominal value of shares in a company having legal personality,
  • from the sale of derivative financial instruments against payment and from the exercise of rights arising therefrom.

As well as with:

  • sale of real estate or a share in real estate for a fee,
  • sale of the cooperative ownership right to the premises against payment,
  • sale of the right to a single-family house in a housing cooperative against payment,
  • sale of perpetual usufruct of land against payment,

- if their disposal took place within 5 years of their purchase and with:

  • from the sale of other things for consideration - if we sold them within six months of their purchase.

However, the income depends on the obtained income - no income will be generated without it. In order for it to arise, the tax deductible costs must be lower than the revenues themselves. In short, income can be defined as the difference between the income earned and the expenses incurred.

On the basis of income, e.g. the amount of taxes for natural persons is calculated, in this case, income is defined as a surplus of the sum of revenues over the costs of obtaining them in a given tax year. When the sum of tax deductible costs exceeds the sum of revenues, we speak of a phenomenon known as a loss.