Poland — administrative division
Since 1998, Poland has a three-tier territorial administrative division of the country—the commune is the basic unit, district is the larger unit and region is the largest. Wielkopolska is one of 16 self-governmental regions. Each level of self-government plays an essential role for entrepreneurs by issuing administrative decisions, permits, and also by promoting areas intended for economic activation. Wielkopolska has 226 communes, whose authorities, among others, register economic entities, 35 districts, whose tasks include issuing building permits.
As a member of the European Union, Poland is part of the customs union with other European countries—goods imported and exported within the Community do not include duty. At the same time, pursuant to the community law our country was obliged to accept the Common Customs Tariff (TARIC). After the entry into force of the EU Customs Code (UCC), i.e. since 1 May 2016, the rules governing the application of the Common Customs Tariff have remained unchanged. Import and export duties due shall be based on the Common Customs Tariff. Other measures prescribed by Community provisions governing specific fields relating to trade in goods shall, where appropriate, be applied in accordance with the tariff classification of those goods.
Rules, rates and other information are available at:
The manner of acquisition of the area or structures for the investment depends on who is its owner. If the owner is a public institution, for instance local government, the sales process is carried out according to the public procurement procedure. The principles of carrying out those procedures are governed by the Procurement Law involving public finances, public works contracts, public supply contracts and public service contracts and others, where the contract value exceeds EUR 30,000.00, i.e., PLN 125.247 (according to the new regulations, as of 1 January 2016 the exchange rate of the Polish zloty against the euro shall amount to PLN 4.1749).
The Public Procurement Office is responsible for coordinating and regulating all matters concerning public procurements and clarifies many important questions at its website: http://www.uzp.gov.pl/.
Tax system and avoidance of double taxation
The tax system in Poland has been evolving for years. Currently, we distinguish 13 types of taxes in our country. Ten of the taxes are direct taxes such as:
- Personal income tax (PIT) — the taxable base for the personal income tax is generally a sum of incomes coming from different sources of revenues. Income was defined by the legislator as a difference between sum of revenues and costs of their earning in a tax year.
Currently, the first tax rate is 18% on income (which exceeds a tax-free allowance, i.e., PLN 3,091.00) up to PLN 85,528.00 annually and the second tax rate is 32% (levied on the surplus of this amount);
- Corporate income tax (CIT) — currently, the tax rate for legal entities in Poland is 19% of the taxable base. The act also provides for a punitive rate of 50% in the event of underestimation of the tax obligation amount by the related entities;
- tax on inheritance and donations;
- tax on civil law transactions;
- agricultural tax;
- forest tax;
- real estate tax;
- transport vehicle tax;
- tonnage tax;
- mineral extraction tax;
and the following three indirect taxes:
- value added tax (VAT) — the basic rate is 23%; other applicable rates are: 8%, 5% and 0% for export and intra-Community supply of goods;
- excise tax;
- gambling and lottery tax.
Natural persons conducting an economic activity (registered in the commune office or city office) may choose their taxation form according to the two-level tax rate or 19% flat tax. Personal income tax involves the entire income of persons who have their place of residence on the territory of the Republic of Poland or stay on the territory of the Republic of Poland for more than 183 days during the tax year.
The tax payable by natural persons is regulated by the provisions of the Personal Income Tax Act of 26 July 1991.
More information at: www.mf.gov.pl, where you can also find information and legal acts regarding the rules for the avoidance of double taxation.
Source: Ministry of Finance
Social security system
In Poland, the social insurance of employees is mandatory. Income is the basis for calculating the contributions and employees are subjected to insurance including:
- retirement pension insurance – 19.52% of the assessment basis,
- disability pension insurance – 8.00% of the assessment basis,
- sickness insurance – 2.45% of the assessment basis,
- accident and health insurance – depending on the type of work performed from 0.67 to 3.60% of the contribution assessment basis.
Source: Social Insurance Institution
Stay and work permit
Foreigners who would like to legalise their stay in Poland on the basis of commencement or continuation of work in Poland should apply for a temporary stay and work permit.
In the case of a temporary stay and work permit, the foreigner has to submit the following documents:
- completed form of the application for temporary residence permit, in accordance with information;
- in the case of compliance with conditions of exemption from the obligation to have the work permit: – the document which confirms fulfilment of these conditions (e.g., the Card of the Pole, the diploma of completion full-time studies on Polish university, the certificate of graduation from a Polish high school);
- the document which confirms place of residence (e.g., residence certificate, rent contract, other contract which enables the residential premises, or application of the authorised person to ensure the foreigner the place of residence);
- employment contract, mandate contract along with bills from the last 3 months (in the case when the party performs the work), task-specific contract;
- certificate of employment from the last employer (in the case when the foreigner performed work for a different employer);
- documents in order to certify stable and regular source of income which is adequate to cover the subsistence costs and dependent family members (for a person who keeps a single household — in the amount higher than net PLN 634 monthly, for the person in the family — in the amount higher than net PLN 514 monthly), e.g., annual PIT return concerning the amount of the foreigner’s income for the last tax year or appropriate certificate from Social Security (ZUS);
- documents which certify health insurance as defined by the provisions of Act of 27 August 2004 on health care services financed from the public funds or confirmation of insurer’s coverage of medical treatment costs on the territory of the Republic of Poland (e.g., the appropriate certificate from Social Security (ZUS), insurance policy);
- if work performance on the territory of the Republic of Poland consists in performing by the foreigner works in management board of a legal entity subject to registration in the register of entrepreneurs shares or stocks of which the foreigner does not have — documents which confirm that the entity entrusting work complies with the relevant conditions.
A temporary residence permit is granted for a period which is necessary to complete the object of this residence on the territory of Poland longer than 3 months to 3 years, with the possibility to apply for subsequent permits.
The foreigner makes the application personally, no later than on the last day of the lawful residence on the territory of the Republic of Poland to the voivode competent with regard to the foreigner’s place of residence.
During making the application the foreigner is under obligation to give his/her fingerprints.
Persons not requiring a work permit in Poland include the members of the European Economic Area and the Swiss Confederation, their family members, and also foreigners who have a permit to settle in Poland.
Source: Office for Foreigners