Changes to deadlines and rules of PIT settlements in 2020 – Poland – Part II
Advance payments for income tax troughout the year
In 2020 we will face more changes in tax settlement. Another novelty is the change in rules for calculations of advance payments for income tax – troughout the year – made by the payer in case of employees who earn enough to exceed the first tax threshold (i.e. PLN 85,528 per year). Pursuant to the Act of 4.10.2018 on personal income tax and some other acts, art. 32 section 1 of the Act of 26.07.1991 on personal income tax has been amended. After this change, advance payments for income tax on an income resulted from an employment relationship and other related relationships are calculated as follows:
- for the months in which the taxpayer’s income, which was obtained in this workplace from the beginning of the year, did not exceed the upper limit of the first threshold – 17% of the income obtained in a given month;
- for the month in which the taxpayer’s income, which was obtained in this workplace from the beginning of the year, exceeded the upper limit of the first threshold – 17% of the part of income obtained in that month, which part did not exceed this amount, and 32% of excess over the upper limit of the first threshold;
- for the months following the month mentioned in point 2 – 32% of the income obtained in a given month.
That means that if the taxpayer exceeds the first tax threshold troughout the month, the payer will have to calculate an income tax advance payment in two ways, i.e. from an amount, which is the upper limit of the tax threshold, he will collect the advance of 17%, but of 32% from the amount exceeding this limit. In a month when the threshold is exceeded, the taxpayer has the right to reduce the advance payment by PLN 43.76, while in a month following the month, in which the exceedance occurred, the taxpayer loses this right.
The above change is aimed at avoiding the situation in which the taxpayer must pay additional taxes in an annual settlement. Thanks to new rules for calculating the advance payment for income tax, an amount collected by the payer should not significantly differ from an amount of tax, from which the taxpayer is obliged to settle in the annual declaration, assuming that there is no additional income or simultaneous employment by several employers throughout the year.
Another change for people whose income exceeded PLN 1 million in 2019 is the obligation to pay the so-called solidarity tribute (art. 30h UPDOF). Payments of this tax are to be used to create the Solidarity Support Fund for Disabled People. The rate of this tax amounts to 4%. The basis for calculating the solidarity tribute is the surplus of PLN 1,000,000 over the sum of income that is taxable on principles determined in art. 27 section 1, 9 and 9a (i.e. income from employment contracts, retirement pensions, pensions, civil law contracts), art. 30b (income from the payable disposal of securities and other financial instruments), art. 30c (income from business activities or special branches of agricultural production which are subject to flat tax) and art. 30f (income from a foreign controlled company). The taxpayer can deduct social and health insurance contributions, paid in a given year, from these incomes.
Settlement of this tax should be submitted by the taxpayer on the DSF-1 form by April 30, 2020.
Radical changes to regulations on the personal income tax
It’s been a long time since there have been such radical changes in the regulations on the personal income tax introduced. These changes challenge seriously both employers and HR & payroll software developers. The most difficult is that the last amendments were introduced during the course of a tax year, which results in many additional problems. However, it is worth analyzing the planned changes on a regular basis to be better prepared and to try to avoid the difficulties arising from them.
Autor: Róża Śleszyńska