Rental income from residential property situated in Poland is chargeable 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, have an obligation to declare this income by submitting a tax return to the Polish tax authorities each year.
The tax year in Poland is the calendar year, running from 01 January to 31 December.
The deadline for filing a Polish tax return under the progressive scale method is 30th April of the year following the tax year to which the income relates (i.e. for 2014 the deadline will be 30th April 2015)
Under Polish tax legislation, all individuals earning rental income in Poland are required to make monthly calculations and payments on account 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 for the month. Once the cumulative net amounts reach the tax free allowance for the year (current annual tax free allowance is PLN 3, 091) the monthly net amount is multiplied by the applicable tax rate and tax payments are made on this basis. At the year end the annual tax return is submitted and the final tax position is determined. This may result in a refund due or a final balancing payment 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 NIP or Tax ID number. 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 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 (CGT) is charged at 19% of the gain after costs (effective for properties purchased after Jan 1st 2007). Properties that have been owned for more than 5 years are exempt from Polish CGT.