Poland Tax Deductions

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Poland Tax Deductions

Poland Tax Deductions

Most forms of tax relief are granted in the form of a deduction from taxable income:
  • The initial allowance to a resident is in the sum of PLN 30,000.
    The credit is allowed is on the lower bracket in the salary tables.
  • Deduction for a social security payment.
  • Deduction for donations.
    (up to a limit).
  • Deduction for medical expenses.
  • Deduction for professional training courses.
  • Alimonies for children, up to PLN 700 per month.
  • Children allowance, PLN 1,112 per child.

Business Deductions in Poland

In addition to the deductions / credits listed above, deductions and business expenses may be claimed according to the following:
  • Offset of losses A loss may be carried forward for 5 years on condition that in any one of the 5 years, no more than 50% of the loss carried forward is utilized.
    It is not possible to offset a loss retroactively.
  • Transactions between associated parties Transactions with associated companies with whom there is a material connection of ownership or control are closely inspected by the tax authorities to compare prices with accepted market prices.
    The documentation of all transactions must be kept for which the amount in any one tax year is in excess of a sum stated by law.
  • Financing expenses for a company are allowed for the higher of PLN 3 million or 30% of the EBITDA .
  • Donations Donations for defined aims, such as for educational, technological institutions and more are recognized up to 6% of the taxable income.
  • Depreciation expenses The customary method of depreciation in Poland is the straight line method.
In certain circumstances, when real estate, machinery and equipment is concerned, depreciation according to the "depreciated balance" method may be requested.
Local companies in areas stricken with unemployment are eligible, subject to certain conditions, to increased rates of depreciation.

Depreciation of Fixed Assets in Poland

Depreciation is allowable at the following rates:

Class of Asset % Depreciation (per annum)
Buildings 2.5
Facilities 4.5
Machinery and equipment 7-25
Computers 30
Vehicles 20

Fixed assets below PLN 3,500 can be fully depreciated in one year.

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