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Changes in Personal Income Tax as of 2013

2012-11-07

As of the new year the taxpayers face changes regarding tax deduction on children, tax deduction on Internet usage and application of tax deductible expenses of 50% by creators. Those changes are stipulated in the amendment to the Personal Income Tax (PIT) Act published on 20 November 2012.

Please note a change in the manner of calculating lump-sum (zryczałtowane) deductible expenses for the purpose of tax on certain remuneration, in particular on account of creators exercising the copyright and artistic performers exercising the related rights or on account of disposition with such rights. To date the expenses in the amount of 50% of revenue less contributions paid to the Social Security Institution (ZUS) were applied. As of the next year, the maximum amount of lump sum expenses cannot exceed PLN 42,764 per annum. It means that the taxpayers whose income is in excess of the first tax threshold will pay a higher personal income tax because of having lost the possibility to apply deductible expenses of 50% without limitation as to their amount. According to the amendment, it is the taxpayer who has to notify the withholding agent during the tax year of resignation from calculating deductible expenses of 50% in connection with exceeding the above limit. If the taxpayer fails do so, he/she will have to pay the shortage in the annual tax return.