The Polish Deal
and the upcoming changes in income tax, pt.1
In November President of Poland Andrzej Duda signed the Polish Deal Act, which provides financial assistance for Polish citizens and entrepreneurs.
Some of the new regulations have already been entered into the Journal of Laws, and will take effect in January 2022. What changes does the Act include?
Financial assistance in the face of a crisis
The main aim of the Polish Deal is to help eradicate problems connected with the COVID-19 crisis. It mostly focuses on changes in tax law, which are beneficial both for entrepreneurs, as well as ordinary households. The assistance includes tax reliefs and additional social benefits for families with children.
Who will benefit from the upcoming changes in tax law?
Polish Deal concerns not only entrepreneurs but also families and ordinary citizens coping with the aftermath of the pandemic. The new programme offers the following solutions…
Tax relief for middle class citizens
The Polish Deal includes special tax reliefs for middle class citizens. Both tax paying entrepreneurs, where general principles of taxation apply, and citizens with employment contracts can benefit from the aforementioned reliefs. Such a solution aims at reducing the cost of health insurance contribution for persons with income between 5 701 PLN and 11 141 PLN per month. Middle class citizens will be able to calculate the amount of the relief per year from now on. The employers are obligated to include the relief in tax settlement process as of next January.
0% PIT for 4+ families
Large families are also supported by the Polish Deal. The new changes include a new 0% personal income tax (PIT-0) for income which does not exceed 85 528 PLN. This means that families with four children or more will be exempt from PIT. This solution is aimed at all parents, both those who run a household and those who run their own business. Single parents will also be able to benefit from PIT-0. The upper income limit for persons settling their taxes on the general principles of taxation is 115 528 PLN, whereas for parents who settle taxes jointly 231 056 PLN.
Changes to be enforced on 1st January 2022
The Polish Deal offers more changes to come, some of which will take effect on 1st January 2022. We will write more about them in the next part of the article.