Poland to Lower Personal Income Taxes, Raise Corporate Tax Rate
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Poland Unveils Tax Reform: Lower Income Tax, Higher Corporate Tax Rate
Key Changes in Poland’s Tax System
Personal Income Tax Adjustments
Raising the Second Tax Bracket
WARSAW, Aug 19 (Reuters) – Poland will raise the second personal income tax bracket and introduce a new tax rate to ease the burden on the middle class, Prime Minister Donald Tusk said on Wednesday, adding that corporate tax for big companies would be raised to compensate the budget.
Background: Wage Growth and Tax Bracket Freeze
With fast-growing wages in the past four years and tax brackets frozen since 2022, millions of middle-class Poles, the core constituency of Tusk’s Civic Coalition, started paying the highest tax rate. Lower personal income taxes were a key pledge of Tusk’s party in the 2023 election.
New Income Thresholds and Rates
The government plans to raise the second personal income tax bracket threshold to 130,000 zloty ($35,000), from the current 120,000.
At the same time, the tax rate for income between 130,000 and 150,000 zloty will be lowered to 24%, with the current rate of 32% applying for income above 150,000, Tusk told journalists.
Corporate Tax Changes
Higher Tax Rate for Large Companies
To compensate for the budget revenue shortfall, the corporate income tax for companies with revenues topping €50 million would be raised to 22% from 19%, he added.
Government Perspective and Budget Impact
Budget Neutrality of the Reform
“The changes proposed today more or less balance each other out. This is probably the first change to the tax system in many years that doesn’t cost the budget, but is budget-neutral,” Finance Minister Andrzej Domanski said during the same press conference.
Exchange Rate Reference
($1 = 3.7298 zlotys)
Reporting Credits
(Reporting by Karol Badohal, Anna Koper, Pawel Florkiewicz, writing by Marek Strzelecki and Anna Koper; Editing by Alex Richardson)
