Rental income from residential property in Poland is subject to tax, regardless of whether the owner is resident in Poland or not. Owners of rental properties in Poland, who are in receipt of rental income, must declare this income by submitting a tax return to the Polish tax authorities each year.
Under Polish tax legislation, anyone earning rental income in Poland is required to make monthly calculations and payments to the tax office by the 20th of the month following the month in which rent was received. Under the progressive scale method, monthly payments are calculated on the rents received for the month less relevant expenses incurred.
Once the cumulative net amounts reach the tax-free allowance for the year (PLN 3,091) the monthly net amount is multiplied by the applicable tax rate and tax payments are made on this basis.
At year-end, the annual tax return is submitted and the final tax position is determined. This may result in a refund being issued or a final balancing payment needing to be made depending on the payments on account made throughout the year.
Tax Identification Number
Non-residents in Poland, who are liable to pay certain taxes, must apply for a Polish tax identification number (Numer Identyfikacji Podatkowej). Foreigners who are considered residents for tax purposes in Poland need to apply for a card of temporary residence.
The rate of income tax is calculated using one of two tax methods:
1. Progressive scaled rates 18%-32% on rental profits after costs.
OR
2. Fixed rate of 8.5% on gross rental income, with no deductions for costs.
Local Polish Property Tax
Local Polish Property taxes (rates) are also payable quarterly and vary per location. Rates range between 0.33 PLN – 0.68PLN per sq. mtr (circ €0.09 – €0.17/sq.mtr).
Polish Capital Gains Tax
Polish CGT is charged at a rate of 19% of the gain after costs (effective for properties purchased after January 1st 2007). Properties that have been owned for more than five years are exempt from Polish CGT.
UK & Irish residents
If you are resident in the UK or Ireland you will have to report any income received in Poland on your annual resident tax return (i.e. your Irish or UK tax return). There are double taxation agreements between Poland and Ireland and Poland and the UK so relief from double taxation is usually available. Your PTI Account Manager can provide further information on double taxation relief or filing your resident tax return.
Polish Tax Services
The Polish tax system can be confusing and at PTI we have 20 years’ experience in preparing and filing international tax returns. Our dedicated tax return service has been specially designed for Polish property owners who live outside Poland.
Your dedicated Account Manager will keep you up to date with all your Polish tax obligations so you can rest assured that you are fully compliant and all payments have been made ahead of deadlines. Property Tax international offers the following services:
- Polish Tax Number (NIP number) registration
- Polish income tax return filing
- Polish Capital Gains Tax assistance
- Assistance with Polish tax payments
- Coordination with your resident tax accountant
FAQs
- As non-resident in Poland, do I need to file a Polish tax return?
- Yes, if you are in receipt of Polish rental income you have an obligation to declare this income to the Polish tax authorities.
- Do I need to get a Polish tax ID number in order to file tax returns?
- Yes, a Polish tax ID number (NIP number) is required for residents and non residents for tax filing purposes.
- How is Polish income tax calculated?
- There are two methods of calculating Polish income tax:
- Progressive scale method – Polish income tax is paid on the actual profit, which is the difference between income and allowable costs. Income tax rates range from 18% to 32%
- Fixed rate method. No tax deductions allowed. Polish income tax is calculated on the gross income without the deduction of costs. Income tax rate is 8.5%
- What is the deadline for Polish income tax filing?
- The Polish income tax filing deadline is April 30th in the following year after income was received under progressive scale method of taxation and January 31st under fixed rate method.
- Am I obliged to file a Polish tax return in relation to the sale of a Polish property?
- The sale of a Polish property must be reported to the Polish tax authorities.
- What are the Polish Capital Gains Tax (CGT) rates?
- For Polish properties purchased after 01.01.2007, Polish CGT is calculated at 19% of the net profit (sale price less sale expenses less gross purchase price).
- What is the pay and file deadline for Polish CGT?
- For Polish properties the CGT is paid and reported through the annual Polish income tax return. The deadline is April 30 or January 31 (as above).
Tax Rates and Deadlines
Polish Tax Return Fees
Initial documents review – €150.00
This fee will apply only once for review of your property related documents for set up of your tax file with PTI.
Tax number Service fees or Tax registration – €100.00 per person
Polish personal income tax returns – €260.00
This service covers the necessary tax returns and their annexes (single or married – 1 property) and includes a detailed review of all supporting documents.
Additional property – €75.00
This fee is due for the second and each subsequent property.
Additional owner – €75.00
This fee is due where there are multiple owners of a property if the owners are not a married couple. This charge covers the preparation of the additional personal return due.
Polish Monthly Tax Estimation – €50.00
This fee is due for estimation of the income tax monthly payments, which need to be processed to the Polish tax office no later than the 20th of the month following the month the income was received.
Capital Gains tax filing – €400.00
The price will be based upon the complexity of the case.
Tax clearance certificate – €50.00
The Polish tax office does not release automatic assessment notices. We can assist with tax clearance certificate applications if required.
Documents retrieval fee – €50.00
This fee will apply if you require PTI to obtain some documents on your behalf, excluding bank and mortgage statements.
Administrative fee – €20.00
This is obligatory and due for each year of submission. It covers postage, phone calls, photocopying etc.)
Assistance with tax payments – €30.00
The Polish tax office does not release automatic assessment notices. We can assist with tax clearance certificate applications if required.
Multiple years discount – 10%
Available where returns for 2 or more tax years are required. This discount is applicable to the annual fees excluding any once off fees and administrative fee and does not apply where other discounts/reductions have been granted.
1. All fees are inclusive of VAT.
2. Prices are based on provision of information in pre agreed format – a surcharge of 20% may be applied for disorganised files.
3. Prices are based on provision of necessary backup documentation only – the inclusion of unnecessary documentation may result in the application of an additional charge.