Tax Incentives for Expatriates and Digital Nomads in Poland
Poland offers a range of tax incentives to attract and retain expatriates and digital nomads. These incentives aim to make Poland a more attractive destination for skilled professionals and remote workers, contributing to the country's economic growth and development.
Eligibility Criteria
To qualify for tax breaks as an expatriate or digital nomad in Poland, individuals must meet specific criteria:
- Expatriates: Expatriates must be non-Polish citizens who have relocated to Poland for employment purposes. They must have a valid work permit or residence card and have resided in Poland for at least 183 days in a tax year.
- Digital Nomads: Digital nomads must be self-employed individuals who work remotely for clients outside of Poland. They must have a stable income and be able to demonstrate that their work is performed primarily from Poland.
Types of Tax Breaks
Expatriates and digital nomads in Poland may benefit from the following tax breaks:
- Tax Exemption on Foreign Income: Expatriates who earn income from sources outside of Poland may be eligible for a tax exemption on that income. This exemption applies to both employment income and business income.
- Reduced Tax Rate on Polish Income: Expatriates who earn income from Polish sources may be eligible for a reduced tax rate of 19% instead of the standard rate of 32%. This reduced rate applies to employment income, business income, and rental income.
- Social Security Contribution Exemption: Expatriates who are not subject to Polish social security contributions in their home country may be exempt from paying social security contributions in Poland. This exemption can result in significant savings.
Application Process
To claim these tax breaks, expatriates and digital nomads must apply to the Polish tax authorities. The application process involves submitting documentation to prove eligibility, such as:
- Proof of residency (e.g., residence card, utility bills)
- Employment contract or business registration
- Income statements from foreign sources
- Social security exemption certificate (if applicable)
Legal Framework
The tax incentives for expatriates and digital nomads in Poland are established through the following legal instruments:
- Personal Income Tax Act (PIT Act): Outlines the tax treatment of individuals, including expatriates and digital nomads.
- Corporate Income Tax Act (CIT Act): Specifies the tax treatment of businesses, including those owned by expatriates and digital nomads.
- Social Insurance Act: Governs social security contributions, including exemptions for expatriates.
Rationale and Objectives
The Polish government has implemented these tax incentives to attract and retain skilled professionals and remote workers. By offering favorable tax treatment, Poland aims to:
- Promote economic growth by attracting foreign investment and talent.
- Support the development of a knowledge-based economy.
- Enhance Poland's competitiveness as a destination for international businesses and individuals.
If delving into the depths of Polish tax rules and regulations isn't your style, and you'd rather have experts take the reins, then Heavnn is here to help.
Let us simplify your tax planning journey. Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
