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Tax reliefs for individuals moving their tax residence to Poland

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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​published on 17​ ​​February​​ ​2025 | Reading time approx. 4 Minutes


The first quarter of each year is the time of preparing annual tax returns in Poland. It is therefore worth exploring tax relief options. 

An interesting proposal for those who have not been Polish tax residents for at least a few years is an additional tax-free amount and a lump-sum taxation of income earned abroad. 

 
Lump-sum tax on foreign income
According to the Polish Personal Income Tax Act, the taxpayer may choose special taxation rules dedicated to income from abroad. 

A taxpayer who chooses to apply this form of taxation pays only a lump-sum tax on income derived from sources located abroad.

Who can benefit from the lump-sum tax on foreign income?

An individual moving their tax residence to Poland may benefit from lump-sum taxation if: ​
  • they submit a statement on choosing lump-sum taxation (using a template form) to the revenue office by the end of January of the year following the tax year in which the individual moves their tax residence to Poland,
  • they have not been a resident of Poland for at least five out of the six tax years immediately preceding the tax year in which that person changed their residence,
  • they adequately document their residence abroad during the required period. 

Amount of the lump-sum tax on foreign income 

​​The lump-sum tax is 200,000 zloty (approx. 47.2 thousand euro) for each tax year, regardless of the amount of income earned abroad. It is therefore a preferential form of taxation, especially for the well-offs. The lump-sum taxation applies for ten consecutive tax years, counting from the tax year in which the taxpayer moves their place of residence to Poland – unless the taxpayer opts out from this form of taxation on foreign income, moves their place of residence outside Poland or fails to meet the conditions for using the preference earlier. 

The lump-sum tax may also be available to a taxpayer’s family member who decides to change the tax residence with the taxpayer. In such a case, the family member may benefit from a lump-sum tax of 100,000 zloty (approx. 23.6 thousand euro) per tax year. 


Taxpayer’s obligations 

​In addition to the relief, the taxpayer relocating to Poland has to meet extra obligations. A person who benefits from the lump-sum tax on foreign income is obliged to incur expenses for economic growth, the development of science and education, the protection of cultural heritage or the promotion of physical culture in the amount of at least 100,000 zloty (approx. 23.6 thousand euro) in each tax year in which they benefit from the lump-sum tax following the year in which they change the tax residence. 

Returnee relief

​The second solution available in Poland is the additional tax-free amount. It allows people who have previously lived and worked outside Poland to benefit from favourable rules of taxation, which can be a significant incentive to return and start a career in Poland. As the relief was intended to encourage Poles who had previously emigrated to work abroad to return to their home country, it is also often referred to as “returnee relief”. ​

The returnee relief consists in a temporary exemption from personal income tax of certain income earned in four consecutive tax years by taxpayers who relocated their residence to Poland after 31 December 2021. The amount of income exempt from tax under the returnee relief does not exceed 85,528 zloty (approx. 20.2 thousand euro) in the tax year.​

Who is eligible for the returnee relief?

The returnee relief is available to taxpayers who meet all of the following conditions: ​
  • they have become Polish tax residents as a result of moving their place of residence to Poland
  • they did not have their place of residence in Poland during the three calendar years preceding the year in which they changed their place of residence, and until the date of changing their residence to Poland
  • ​they have Polish citizenship, the Pole’s Card or citizenship of another EU or EEA Member State or of the Swiss Confederation, or they resided: 
    • in the EU, EEA, the Swiss Confederation, Australia, Chile, Israel, Japan, Canada, Mexico, New Zealand, Republic of Korea, the United Kingdom of Great Britain and Northern Ireland or the United States of America, uninterruptedly for at least three years, or 
    • in Pol​​and for at least five calendar years preceding the three-year period
  • they have properly documented their tax residence abroad
  • they did not benefit, either in whole or in part, from the returnee relief in the past​
Owing to the income tax exemption available for the first four​ years, those settling in Poland have an easier start to their new career in Poland. However, it must be borne in mind that in order to properly benefit from the relief it is essential to meet the formal requirements and submit the relevant documents in a timely manner. 

Summary 

The additional tax-free amount and the lump-sum tax on foreign income are two different tax reliefs available to the same group of taxpayers, i.e. individuals wishing to move their tax residence to Poland. If you would like to benefit from the reliefs, it is worth consulting a tax adviser first, who will help you apply the regulations correctly. A thorough analysis of the laws applicable to your specific circumstances will allow you to avoid potential mistakes and minimise the risk of incorrect tax accounting, including the loss of the right to apply the reliefs. 

What is important, a taxpayer who moves their residence to Poland may still be obliged to pay taxes in another country, including so-called exit tax in the country of previous tax residence. Therefore, before deciding to change tax residence, you should always thoroughly examine its implications first. If you are considering moving your tax residence to Poland, you are welcome to contact us. We will be happy to review your economic situation and propose the best solution tailored to your setup. ​

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Monika Spotowska

Associate Partner (Poland)

+48 22 1034 613

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