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Poland’s Ministry of Finance has announced the start of consultations on the pending solidarity duty, a surcharge to be paid by natural persons with taxable annual incomes exceeding PLN 1 million (about $263,000).

The 4 percent surtax, which will apply in addition to the personal income tax, will be levied on the basis of an October 2018 law on a Solidarity Support Fund for Disabled Persons. The fund will be partly financed by the duty, which will enter into force in 2020 for natural persons with incomes that exceed the PLN 1 million threshold in 2019.

The solidarity duty will generally apply to taxable income obtained from all sources, including the
following:

  • regular employment income or business income that is subject to progressive taxation at the rate of 18 percent or 32 percent, respectively;
  • income from business activity that is subject to an optional flat-rate tax of 19 percent;
  • capital gains; and
  • controlled foreign corporation income that is subject to the general corporate income tax rate of 19 percent.

Married spouses will not be allowed to file joint tax returns for the purpose of calculating the solidarity duty, but can file jointly for the purpose of personal income tax.

Foreign-source income received from countries that have signed income tax treaties with Poland that provide for an exemption with progression as a general method for the avoidance of double taxation will not be included in the tax base for the purpose of calculating the solidarity duty. The tax base will be reduced by the amounts of Polish and foreign social security charges paid, as well as by dividends received from CFCs and foreign capital gains, provided that those categories of income have already been included in the tax base for CFC purposes.

Unlike the personal income tax regime, which requires the filing of annual tax returns after the end of the tax year (which is the full calendar year), tax returns related to the solidarity duty will cover the period from May 1 through April 30 of the next calendar year. The first filling must be made before April 30, 2020.

The consultation on the solidarity duty will close March 26.

Janusz Fiszer, partner at GESSEL Attorneys at Law and associate professor, School of Management at the University of Warsaw.