The so-called relief for return introduced in 2022 by the government program Polish Deal still applies to personal income tax. The assumption of the relief is to encourage Poles currently living abroad to return to Poland, as well as to make it easier for foreigners to start their career in the territory of our country. It is worth taking a closer look at this relief, because after meeting certain conditions, the legislator has provided for a significant exemption from taxation of the taxpayer's income for a period of up to four years.
The relief for return gives the taxpayer the right not to pay personal income tax from the amount not exceeding PLN 85,528 in a given tax year. It should be remembered that if the taxpayer is also entitled to use other reliefs, such as the relief for young people, the relief for working seniors or the relief for families with 4+, the limit of PLN 85,528 applies to all these reliefs in total. The relief is available once for a maximum of four consecutive years (without the possibility of using the relief in parts) starting from the year in which the tax residence was transferred to Poland or from the beginning of the year following the year of tax residence transfer to Poland. Importantly, the relief is available only if the place of residence was transferred to the territory of the Republic of Poland starting from 2022, whereas if it happened in earlier years - the taxpayer will not benefit from the tax exemption.
What conditions must be met?
The relief is available to persons who, among others:
- are subject to unlimited tax liability in Poland as a result of transferring their place of residence to Poland and
- did not have a place of residence in Poland in the period covering:
- three calendar years preceding the year in which they changed their place of tax residence to the territory of Poland, and
- the time period from the beginning of the given year until the day preceding the day on which they changed their place of residence to the territory of Poland (i.e. until the date of change of tax residence, if this change took place during the tax year), and
- hold Polish citizenship, a Pole's Card, citizenship of an EU country other than Poland, citizenship of a country belonging to the EEA or Switzerland, or
- had their place of residence for tax purposes for an uninterrupted period of at least 3 years (taking into account the year of change of tax residence to Poland) in an EU country, EEA country, Switzerland, Australia, Israel, Chile, Canada, Japan, Mexico, South Korea, Great Britain, New Zealand or the USA, or
- had an uninterrupted tax resident status in Poland for at least 5 calendar years preceding the period of departure from Poland for at least 3 calendar years and
- have a document confirming their place of residence for tax purposes in other countries for the required period (periods), such as a certificate of residence. Possession of the above-mentioned document issued no later than at the time of commencement of using the relief for return is a necessary condition.
Types of income qualifying for the relief for return
The relief for return covers income obtained, among others, from: an employment contract, service relationship, outwork, cooperative employment relationship, contract of mandate, economic activity (taxed according to the tax scale, 19% flat tax, 5% rate - the so-called IP Box relief and a lump sum on recorded income), as well as from maternity benefit.
What actions should be taken
People who have met the conditions for the relief for return can take advantage of the relief on an ongoing basis when collecting tax advances on a monthly basis during the year while already working in Poland. To do this, you must submit a declaration to your employer that you meet the conditions for using the relief, under penalty of criminal liability. Using the relief for return in settlements already during the tax year is not a necessary condition, the taxpayer can use it only at the stage of filing the tax return for that year. In practice, using the relief means not reporting the income covered by the relief on the tax return.
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