The Polish tax law offers taxpayers many opportunities to reduce their tax liability for 2022. Taxpayers have time to take advantage of some of the available tax reliefs and deductions like e.g. the relief for monuments only until the end of December 2022.
In 2022 Polish annual tax return the taxpayer may include deductions handed over until the end of December 2022 for purposes:
- public benefit organizations,
- blood donation (the so-called blood relief),
- religious worship as well as charitable and welfare activities of the Church,
- vocational training to public schools providing vocational training and public establishments and centers,
- fight against COVID-19.
At the same time, it is important to remember to appropriately confirm the donation made (donations made in cash will not be deducted) and that for the above deductions we will deduct no more than 6% of the taxpayer's income (note: the exception is donations made to the Church's charitable and welfare activities as well as to fight against COVID-19, which we will deduct without limit).
Examples of new deductions and preferences in 2022
The relief for monuments
Also, only until the end of December 2022 taxpayers can take advantage of an opportunity introduced by the Polish Deal, i.e. the relief for monuments, commonly known as palace plus.
The taxpayer may reduce his/her tax liability if:
- the taxpayer pays money into the repair fund of a housing community or housing cooperative for a historic residential building,
- spends the money on conservation, restoration or construction work in the monument, or
- will buy a monument (or a share in a historic building), listed in the register of historic buildings and will cover the costs of the repair or maintenance of this property.
In the case of the purchase of a historic property, we will deduct the expenses incurred on this account in the amount not exceeding PLN 500 000, while we will deduct up to 50% of the expenses incurred for the renovation, maintenance or renewal of the monument from income (revenue). The incurred costs must be documented with invoices.
Preferential settlement for spouses and single parents in 2022
The Polish Deal introduced a profitable change for spouses regarding the possibility of joint tax settlement. A marriage entered into in any month of 2022 qualifies for a joint return for the entire 2022 year. Previous years, spouses had to be married for the entire year in order to benefit from a joint-married tax return for a given tax year.
In 2022, the Polish Deal initially removed the possibility for single parents to file a joint tax return with their child (proposing instead a tax deduction of PLN 1 500), and later brought back this possibility. A joint tax return with a child can be more beneficial for a single parent than filing an individual tax return.
The relief for robotization
Taxpayers settling their income according to the tax scale and the flat rate tax will use the new robotization tax relief for the first time in 2022. What is important, along with the taxpayer's PIT-36 or PIT-36L tax return, it is necessary to submit, according to the template, a list of costs deducted under the relief including e.g. costs of purchasing brand-new: industrial robots; machinery and peripherals related to the robots or systems and equipment used e.g. to monitoring and servicing the robots.
It is possible to deduct from income a sum equal to 50% of the tax deductible expenses incurred for robotization in the tax year, but this amount cannot be higher than the non-agricultural business income earned in that tax year, and the taxpayer may incur expenses related to robotization between 2022 and 2026. It is only possible to take advantage of the relief in the PIT return in which expenses for robotization were included.
Deduction for cultural and sports activities
As of 2022 a taxpayer running a non-agricultural business activity may also deduct from income 50% of the expenses incurred for sports, cultural activities or activities supporting higher education and science, but up to a limit not exceeding the amount of income earned in a given tax year from business activity. At the same time, the deduction applies to entrepreneurs who settle their income with a flat tax or general rules and is only possible in a tax return filed in the year in which the expenses were incurred.
Some examples of deductible costs under the deduction (subject to certain conditions) are expenses for financing, e.g.
- sports club,
- sports scholarship,
- a sports event,
- cultural institutions,
- cultural activities of art colleges and public art schools.
- academic scholarships.
What is important, the taxpayer is obliged to submit an information listing the deductible costs incurred, by the deadline for filing the tax return in which he/she takes advantage of the relief.
Other reliefs and deductions available in 2022
Similar to the 2021 tax year, taxpayers who want to reduce their PIT liability for 2022 can take advantage of the following reliefs: rehabilitation relief, internet relief, thermo-modernization relief, or the so-called "relief for young" or "children's relief," as well as: the IKZE deduction.
Moreover, people who have sold a property before the end of 5 years after the purchase can avoid paying tax (this is known as a housing relief) if they use the profit from the sale of the property for their own housing purposes within 3 years of the sale.
1. Selected tax deductions in 2022 (click on the picture to enlarge)
2. Selected income deductions in 2022 (click on the picture to enlarge)