|
 Alex Staniszewski of Staniszewski & Richter reviews major changes for 2007.
Personal tax
Residence
Residence criteria will now be based on the provisions of the model
OECD tax convention. Persons resident in Poland are subject to
unlimited tax obligation on their worldwide income. A resident is
defined as person whose centre of personal or economic interest is in
Poland or who spends more than 183 days in Poland in a tax (calendar
year).
Capital gains on real estate sales
Gains will now be taxed at 19 per cent of sale proceeds less initial purchase costs.
Previously real estate sales were taxed at 10 per cent of sale
proceeds, with properties held for at least 5 years exempt from
taxation.
Business Taxes
Small tax payer
A small taxpayer is defined as an entity that had gross sales
(net sales plus VAT) not exceeding EURO 800 000 during the previous tax
year.
Such taxpayers may use accelerated tax depreciation (i.e. 100 per cent)
in respect of tangible and intangible fixed asset purchases of up to
EURO 50 000 in a given tax year (excluding real estate and private
motor cars).
It should be noted that the above provision is treated as a form of
state aid (de minimis) and may affect a taxpayer’s position when
applying for other forms of state aid, e.g. payment of tax or social
security liabilities in instalments.
Self-employment (definition)
The possibility of self-employment has been narrowed to exclude activities which if one of the following criteria are met:
· civil liability for activities performed rests with the customer,
· activities are carried out at a time and place indicated by the customer,
· the contractor does not bear the economic risk associated with his activity.
Contracts for specific work (umowa o dzieło)
Such contracts are highly tax efficient as they qualify for a flat rate of 50 per cent tax expenses.
Qualifying activities will be severely restricted from 1 January 2007,
and comprise: inventions, maps, industrial and other designs, trade
marks, and decorative designs.
Foreign exchange gains and losses (art. 9b and 15a)
Ability to use either accounting method (all gains or losses whether
realised or unrealised) or tax method (realised gains or losses).
Election needs to be made by the end of January 2007 and is effective
for 3 years. Only entities subject to audit may elect to use the
accounting method.
Expenses which are now tax deductible
· All advertising whether public or non-public is now a tax
deductible expense. Previously non-public limited to 0.25% of turnover.
· Medical expenses (e.g. employee medical cover).
|
Expenses which are now no longer tax deductible
· Representation costs, namely catering services, food and beverages.
Expenses-definition
Expenses are now defined as direct or indirect. This will now assist in apportioning expenses to appropriate tax periods.
Personal motor cars-classification
The definition of a personal motor car has been tightened up to prevent
or reduce the chance of classifying such a vehicle as a goods’ vehicle
which are subject to more favourable tax depreciation regulations.
Tax Depreciation
The general 30 per cent depreciation rate on new fixed assets
(equipment) is now ended. Assets purchased by large companies will
generally be subject to lower rates of depreciation. However, assets
purchased prior to 31 December 2006 will remain subject to existing
depreciation rates.
Quarterly tax reporting more favourable conditions
Small tax payers as defined above, may file tax declarations and pay
tax instalments quarterly. The same provision applies to newly formed
entities in their first year of operation.
Tax Declarations
The system of filing monthly or quarterly declarations will be scrapped
from January 2007. An annual tax declaration will be filed, however
taxpayers must maintain sufficient records to justify monthly or
quarterly tax instalments made.
Charitable donations
Donations may now be made to EU or EEA located charities, and are deductible up to 6 per cent of taxable income.
Tax bands and allowances
These have been subject to indexation for the first time since 2001.
Tax rates and bands in force from 1 January 2007 onwards are as follows:
| Income bracket PLN |
Income Tax PLN |
| up to 43,405 |
19% minus PLN 572.54 |
| over 43,405 up to 85,528 |
PLN 7 674.41 plus 30% on amounts over PLN 43 405
|
| over 85,528 |
PLN 20 311.31 plus 40% on amounts over PLN 85 528 |
Author can be contacted at:
E-mail:
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Also see:
"Employment & Self-Employment in Poland"
Corporate Income Tax 2007
New British Polish Tax Treaty effective from 1 January 2007
|
