Poland: Advance payments of individual income tax, implications for employers

Extended deadline for collecting and transferring certain individual (personal) income tax advance payments

Implications for employers

The Ministry of Finance on 8 January 2022 issued a decree extending the deadline for collecting and transferring certain individual (personal) income tax advance payments.

The decree was issued in response to the reduction in remuneration experienced by some taxpayers in January 2022 because of the launch of the “Polish Deal” program.

The intention is to extend the deadline for collecting the advance payments; however, there are implications for employers—they will need to analyze a hypothetical remuneration of the taxpayer under both the rules introduced under the Polish Deal and under the previously applicable rules and then collect the amount of advance payment under the rules providing for a lower amount.

Thus, it will be necessary for employers to properly adjust their accounting systems and explore possibilities of not applying the new mechanism. When employers have already paid remuneration to taxpayers in January and that amount is lower than remuneration paid out in line with the rules applicable before 1 January 2022, they are required to make the necessary remuneration adjustments.

Read a January 2022 report prepared by the KPMG member firm in Poland 

 

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