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Relief for returning

The return tax relief is a preferential tax benefit for individuals who decide to relocate their tax residence to Poland. Its purpose is to encourage both Poles who have emigrated and foreigners to relocate their center of life and economic interests to Poland.

Thanks to this relief, taxpayers can reduce their tax burden in the first years after arrival, thus increasing the profitability of relocation to Poland.

The exemption applies to certain income from:

employment contracts
contracts of mandate
economic activity

up to a maximum amount of PLN 85,528 per year for the next 4 years. This means that in each of the 4 years you can benefit from the exemption up to PLN 85,528.

The relief is valid from the year in which the taxpayer transferred his tax residence to Poland or from the following year – the decision is made by the taxpayer himself.

Importantly, if you transferred your tax residence to Poland, for example, in 2023 and haven't yet used the tax relief on re-entry, you still have the option. You can submit an amended tax return for previous years and include the relief. This will allow the tax office to refund any overpaid tax for previous years.

To benefit from the relief, several key conditions must be met:

as a result of the transfer of residence, which had to take place after 31 December 2021, there was a change of tax residence from foreign to Polish, and
for three calendar years immediately preceding the year in which the change of tax residence to Poland took place, the territory of Poland was not the place of residence of the transferring person.
having Polish citizenship, the Polish Card or citizenship of a country other than Poland
a member state of the European Union or a country belonging to the European Economic Area or the Swiss Confederation or having a place of residence:
- for at least three years in a Member State of the European Union or a country belonging to the European Economic Area, the Swiss Confederation, Australia, the Republic of Chile, the State of Israel, Japan, Canada, the United Mexican States, New Zealand, the Republic of Korea, the United Kingdom of Great Britain and Northern Ireland or the United States of America, or
- in the territory of Poland for at least 5 calendar years preceding the three-year period and
possession of a certificate of residence or other evidence documenting the place of residence for tax purposes during the period necessary to establish the right to this exemption, and
not having previously used, in whole or in part, the return relief.

Q&A

Can I benefit from the tax relief on my return if I lived in a country where I don't pay taxes? taxes (e.g. Dubai)?

The return tax relief is not dependent on whether taxes were paid in the country of residence – the regulations only require a period of at least three years without a place of residence in Poland and then transferring tax residence to Poland. When verifying the validity of the return tax relief, tax authorities only examine whether the taxpayer can document their place of residence for tax purposes outside of Poland (e.g., a residence certificate, a lease agreement for an apartment abroad, an employment contract, bank statements, etc.), not whether they actually paid their personal income tax there. The lack of an income tax system in a given country, such as Dubai, does not exclude the right to the relief. The key requirement is actual residence outside of Poland and possession of documents confirming this status.

I lived abroad for a few years and I want to return to Poland and take advantage of the tax relief. return – how to go about it?

First, make sure you meet all the conditions to benefit from the return tax relief. If so, in the following cases:
- Working under an employment contract – you must submit a declaration to your employer confirming that you meet the conditions for the tax relief upon return. In this declaration, you must inform your employer that you meet the conditions for applying the tax relief and indicate the start and end years of the tax relief. There is no official template for this declaration; you can create your own, or find a template for this declaration on the podatki.gov.pl website. If you do not submit this declaration to your employer, you can include this tax relief when preparing your annual tax return – you will then receive a refund of any overpaid tax.
- running your own business – you should take into account the tax relief on return in your monthly settlements, or apply it only after the end of the tax year in your tax return.
However, it's important to remember that the tax authority may audit your tax return and request documents confirming that you meet the conditions for the return tax relief. Such a document may be a certificate of residence or other proof of your place of residence for tax purposes during the period necessary to establish eligibility for this relief. Tax rulings indicate that taxpayers should submit, for example, a certificate of residence, an employment contract, a lease agreement for an apartment abroad, a certificate from a former foreign employer, employment history, foreign tax returns, payslips, or bank statements to document their place of residence outside of Poland for tax purposes. The more detailed documentation of your place of residence outside of Poland, the greater the chance that the tax authority will easily confirm your eligibility for the return tax relief.

How to apply for relief on return?

The return tax relief works by allowing the taxpayer to assess whether they meet the statutory requirements. If they believe the criteria are met, they can begin applying the relief immediately – there's no need to report the exemption. However, it's important to remember that the tax office may later verify whether the requirements were actually met, so it's worth collecting documents confirming your residence outside of Poland.

If I earn more than PLN 85 per year, tax will be calculated only on the excess over 85?

Yes. The return tax relief works by exempting income up to PLN 85,528 annually. If your annual income doesn't exceed this amount, you won't pay any personal income tax at all. However, if you earn more, tax will only be charged on the amount above PLN 85,528. Additionally, if you're taxed according to the tax scale (12%/32%), there's a tax-free allowance of PLN 30,000 annually, which further reduces your tax base. For example, with an annual income of PLN 120,000, the return tax relief exempts PLN 85,528, and you can subtract the tax-free allowance from the remaining PLN 34,472 – meaning you'll actually pay tax on PLN 4,472. This preference applies for four consecutive tax years, counting from the year you return to Poland or – if you so choose – from the following year.

Do you get PLN 85 at the end of the tax year?

The PLN 85,528 tax relief is not paid to the taxpayer, but represents a tax-free income limit. In practice, income up to this amount is exempt from personal income tax, resulting in a higher net income for the taxpayer or a lower tax payment in the annual tax return. Therefore, the real benefit comes from tax savings, not an additional payment from the government.

The amount of PLN 85,528 in return relief is not paid to the taxpayer, but means income limit up to which tax is not paid. In practice, it looks like this: income up to this amount is exempt from PIT, so the taxpayer has a higher the net amount or lower tax payable in the annual tax return. Thanks to this the real benefit is tax savings, not an additional payment from states.

The PLN 85,528 tax-free allowance is not paid to the taxpayer, but rather represents an income limit up to which tax is not payable. In practice, income up to this amount is exempt from personal income tax, resulting in a higher net income for the taxpayer or a lower tax payment in the annual tax return. This provides the real benefit of tax savings, not additional government payments. Regarding a personal income tax return from another country, submitting only this document may not be sufficient, as filing a personal income tax return in another country does not always mean that the taxpayer had a place of residence for tax purposes in that country for the entire year.

Is the return relief also available for business activities?

Yes. Income earned from non-agricultural business activities is subject to the tax relief. This activity may be taxed according to the tax scale, a flat tax, or a lump sum on recorded income.

Does the issue of registration affect the possibility of using the tax relief? return?

Registration is irrelevant to the return tax relief – what matters is the actual place of residence and tax residency. This is confirmed by an individual interpretation issued by the Director of the National Tax Information (KIS), in which the authority clarified that even a person who was registered in Poland for the entire period of their stay abroad can still benefit from the return tax relief after meeting the statutory requirements. Registration does not determine residence for tax purposes and does not exclude the right to exemption.

I have been living abroad for several years, but I earn income in Poland due to renting a flat – will I be able to benefit from the tax relief after returning to Poland? back?

Having a source of income in Poland, for example, from a private rental, while not being a Polish tax resident, does not determine one's place of residence for tax purposes. Residence is determined by the actual center of vital and economic interests and the number of days spent in Poland, not the mere fact of earning income in a given country. Earning income in Poland may influence the determination of one's actual center of vital and economic interests, but it does not determine it completely. Therefore, filing tax returns in Poland while not being a Polish tax resident in connection with rental income does not exclude the right to apply the tax relief on re-entry.

I came back to Poland in 2022, but I didn't know that I could take advantage of such a relief – can I still use it?

The return tax relief can also be used retroactively if all statutory conditions were met after returning to Poland but the relief was not included in the tax returns. In such a case, the taxpayer has the right to submit amended tax returns for the years they wish to claim the relief – within the maximum four-year period of the preferential treatment. It's important to remember that an amendment will only be effective if the five-year statute of limitations on the tax liability has not yet expired. In practice, this means that overpaid tax can be recovered for previous years in which the relief could have been applied but was not used. This allows for the benefit of the preferential treatment to be used even with a delay, provided the specified time limits are not exceeded.

What if I still live in Germany but plan to move to Poland? start a business?

The return relief is only available if you transfer your tax residence to Poland. Simply establishing a business in Poland while continuing to live in Germany does not entitle you to the relief. In practice, it works like this:
1. if you still live in Germany and only run a business in Poland, you are still a non-resident and you are not entitled to the relief on return,
2. However, if you decide to move your life centre to Poland and become a Polish tax resident, from that moment on you can start using the relief on your return (also as part of your business activity).
Therefore, the key is not just running a business, but the moment when you actually return to Poland as a tax resident - then you can start taking advantage of the return relief as part of your business activity.

Is the time calculated based on the exact dates of departure and return to the country? or calendar years?

The return tax relief is linked to full tax years, not the exact dates of departure or return to Poland. The regulations require that the taxpayer not have resided in Poland for three consecutive calendar years preceding the year of return. In other words, months or days spent abroad are not added together – entire calendar years are decisive.

Krzysztof Burzynski
Partner, Tax Advisor