If you are returning to Poland after several years of emigration and plan to start a business, you should consider whether the so-called return relief is for you! We present its most important principles, information on how to prepare for its implementation, and what to watch out for when applying it. Consider if you can apply for the relief for returning.
Who can apply for the relief for returning?
The so-called return relief consists of exempting selected income received by individuals, including those who:
(1) moved to Poland after December 31, 2021 ;
(2) did not reside in Poland during the three calendar years immediately preceding the year and from the beginning of the year to the day immediately preceding the day they returned to Poland;
(3) have not previously benefited from this exemption;
(4) have evidence documenting the place of residence for tax purposes in the period necessary to take advantage of the exemption.
The relief applies to income from:
– from an employment contract;
– from mandate contracts;
– from business activities taxed under the tax scale, flat-rate tax, or lump-sum income tax.
So, it’s an enticing proposition for entrepreneurs, especially in the IT sector.
How much can you save with this relief?
A person utilizing the return relief for four consecutive years can enjoy an income tax exemption, which amounts to PLN 85,528 in a tax year. In practical terms, this amount is not subject to taxation.
In some cases, this could mean savings of up to PLN 28,000 in tax annually, totaling PLN 112,000 over four years.
What documents should you prepare?
One of the conditions for applying this relief is submitting a statement to the payer expressing your intention to take advantage of the relief and meeting the conditions. This statement also includes information about the periods of utilizing the relief.
The relief applies to individuals returning to Poland, but the taxpayer must be able to prove that they had been residing in Poland for at least five years before the minimal (three-year) period of living abroad.
Furthermore, the taxpayer must obtain a residence certificate or another document confirming their residence outside Poland during the aforementioned three-year period.
You can find more information in the official explanations regarding this relief available at this link.
Relief for returning – how we can assist?
We support our clients by conducting a thorough analysis of their situation and preparing appropriate calculations. We will assess whether you are eligible for the return relief and provide advice on the documents you need to prepare. During consultations, we analyze revenue and cost structures to determine the optimal form of taxation and the potential application of the relief. We also consider the possibility of joint filing with a spouse or applying specific tax reliefs under PIT/ZUS.
To do this, we require a detailed description of your situation, as well as estimated revenue and cost figures. With these numbers, we can help you choose the optimal tax approach.
Our guidance always concludes with a personalized discussion during individual consultations, where we address any doubts and discuss strategies to mitigate tax risks.
Find out more at www.outsourced.pl.
