Poland Employment & Payroll Guide: Employment Laws, Payroll & Taxes

Chapter 1
Subject and Object of Taxation

Article 1
This Act regulates the taxation of personal income tax on the income of natural persons.

Article 2

The provisions of this Act shall not apply to:
(1) income from agricultural activity, except for income from special branches of agricultural production;
(2) income subject to the provisions on inheritance and donation tax;
(3) income resulting from acts which cannot be the subject of a legally effective contract.
Agricultural activity within the meaning of paragraph 1 item 1 means plant and animal production, including also production of seed, nursery stock, breeding and reproductive material, vegetable production, greenhouse and foil-tunnel vegetable production, ornamental plant production, mushroom cultivation, orchard production, breeding and production of breeding material of animals, birds and useful insects, industrial-farm animal production and fish farming, as well as activity in which the minimum periods for keeping purchased animals and plants, during which their biological growth takes place, are at least:
(a) one month for plants,
(b) 16 days for high-intensive fattening of specialised geese and ducks,
(c) 6 weeks for other slaughter poultry,
(d) 2 months for other animals
— counting from the date of acquisition.
Special branches of agricultural production are: cultivation in greenhouses and heated foil tunnels, mushroom and mycelium cultivation, cultivation of plants “in vitro”, poultry hatcheries and breeding of slaughter and laying poultry, breeding and keeping of fur and laboratory animals, breeding of earthworms, entomophages and silkworms, running apiaries, and breeding and keeping of other animals outside an agricultural holding.
Whenever the Act refers to an agricultural holding, this shall mean an agricultural holding within the meaning of the provisions of the Agricultural Tax Act.
The Minister of Finance, in agreement with the Minister of Agriculture and Food Economy, shall specify, by regulation, the types, sizes and conditions of special branches of agricultural production.

Article 3

Natural persons, if they have their place of residence in the territory of the Republic of Poland, are subject to tax liability on all of their income regardless of the location of the sources of income (unlimited tax liability).
The tax liability specified in paragraph 1 shall not apply to persons who, although residing in the territory of the Republic of Poland, are employed in foreign diplomatic missions, consular offices, missions or special missions in the territory of the Republic of Poland, and who are not Polish citizens.
Exempt from income tax on income obtained from sources of revenue located abroad are members of the personnel of diplomatic representations and consular offices, as well as other persons enjoying privileges and immunities under statutes, agreements or commonly accepted international customs, if they are not Polish citizens and do not have permanent residence in the territory of the Republic of Poland.

Article 4
Natural persons, if they do not have their place of residence in the territory of the Republic of Poland, are subject to tax liability only on income from work performed in the territory of the Republic of Poland under an employment relationship or service relationship, regardless of the place of payment of remuneration, and on other income earned in the territory of the Republic of Poland (limited tax liability).

Article 5
For the purposes of this Act, the territory of the Republic of Poland also means the area outside the territorial sea in which the Republic of Poland, under domestic law and in accordance with international law, exercises rights relating to the examination and exploitation of the seabed and its subsoil and the natural resources thereof.

Article 6

Spouses shall be taxed separately on the income earned by each of them.
Spouses between whom there exists marital community of property, remaining in a marital relationship throughout the entire tax year, may, however, upon joint request expressed in the annual tax return, be taxed jointly on the sum of their incomes. In such case the tax is determined in the name of both spouses in double the amount of the tax calculated on half of their joint income.
The rule expressed in paragraph 2 also applies if one of the spouses did not earn income or earned income in an amount not causing tax liability.

Article 7

The income of minor own children and adopted children, except for income from their work, scholarships and items given to them for free use, shall be added to the income of the parents unless the parents are not entitled to collect benefits from the sources of the children’s income.
If the spouses are subject to separate taxation, the income of the minor child shall be added in equal parts to the income of each spouse.

Article 8
Income from joint ownership, joint possession or common use of things or property rights of persons other than legal persons shall be determined proportionally to their shares. In the absence of proof to the contrary, shares are deemed equal.

Article 9

All types of income are subject to income tax, except for the income listed in Articles 21, 52 and 53 and income from which, under the provisions of the Tax Ordinance, collection of tax has been waived. Income achieved in a tax year, subject to Articles 24, 28, 29, 30 and 41 paragraph 3, constitutes the excess of the sum of revenues from a source over the costs of obtaining them, achieved in the tax year. If the costs exceed the sum of revenues, the difference is a loss from the source of revenue.
Income from a source of revenue, if Articles 24 and 25 do not provide otherwise, is the excess of revenue from that source over the costs of obtaining it in the tax year. If the costs of obtaining revenue exceed the amount of revenue, the difference is a loss from the source of revenue.
If the loss from a source of revenue exceeds the income from the remaining sources, the taxpayer may reduce income obtained from that source in the next three tax years by portions of the loss obtained from that source.
Chapter 2
Sources of Revenue

Article 10

Sources of revenue are:
(1) service relationship, employment relationship, including cooperative employment relationship, membership in an agricultural production cooperative or another cooperative engaged in agricultural production, outwork, retirement pension or disability pension;
(2) performance of a liberal profession or other independent activity of a similar nature;
(3) non-agricultural business activity;
(4) special branches of agricultural production;
(5) real property or parts thereof;
(6) lease, sublease, tenancy, subtenancy and other contracts of a similar nature, including also tenancy, subtenancy of special branches of agricultural production and an agricultural holding or its components for non-agricultural purposes or for running special branches of agricultural production;
(7) monetary capital and property rights;
(8) sale, subject to paragraph 2:
(a) real property or parts thereof and a share in real property,
(b) cooperative ownership right to residential premises and rights resulting from the allocation by a housing cooperative of: a single-family house or premises in a small residential building,
(c) the right of perpetual usufruct of land,
(d) other things
— if the sale does not take place in the course of business activity and was effected, in the case of sale of real property and rights specified in letters (a)–(c), before the lapse of five years, and in the case of other things, before the lapse of half a year, counting from the end of the month in which acquisition took place;
(9) other sources.
If a taxpayer, under Article 26 paragraph 1 item 6, deducted expenses incurred on the construction of a building intended for rental, then the sale of that building, of part thereof, of residential premises in that building, of income from the rental thereof, shall be subject to this Act if the sale took place before the lapse of ten years counted from the end of the tax year in which the building was erected.

Article 11

Revenue, subject to Articles 14–19 and 20 paragraph 3, are money or pecuniary values received or placed at the taxpayer’s disposal in a calendar year and the value of benefits in kind and other gratuitous benefits received.
The value of benefits in kind, subject to Article 12 paragraphs 2 and 3, shall be determined according to average prices used in a given locality on the date the revenue is obtained in trade in things of the same kind and species, taking into account in particular their condition and degree of wear.
Revenue in foreign currencies shall be converted into zlotys according to the exchange rates on the day the revenue is obtained, announced by the National Bank of Poland and applied in the purchase of currencies.

Article 12

Revenue from service relationship, employment relationship, outwork and cooperative employment relationship shall be deemed to include all kinds of monetary payments and the pecuniary value of benefits in kind or their equivalents, regardless of the source of financing these payments and benefits, and in particular: basic remuneration, remuneration for overtime work, various kinds of allowances, rewards, equivalents for unused leave and all other amounts irrespective of whether their amount was determined in advance, and, moreover, monetary benefits borne for the employee, as well as the value of other gratuitous benefits or partially paid benefits.
The pecuniary value of benefits in kind shall be determined according to the rules specified in separate provisions concerning the determination of the basis for social insurance contributions.
The value of other gratuitous benefits shall be determined:
(1) if the предмет of the benefits are services included in the employer’s business activity — according to prices applied to other recipients;
(2) if the employer purchased the services — according to purchase prices;
(3) if the subject of the benefits is making a residential premises available — in the amount of the equivalent of rent which would be due in the case of concluding a rental agreement for that premises.
For the purposes of this Act, employees shall be deemed to mean persons remaining in a service relationship, employment relationship, outwork relationship or cooperative employment relationship.
The value of raw materials and auxiliary materials provided by the ordering party to persons performing outwork, and reimbursement of transport costs to the place where the outwork is performed and of electricity consumed by these persons in connection with performing outwork, is not included in revenue.
Revenue from membership in an agricultural production cooperative or another cooperative engaged in agricultural production shall be deemed to include all revenue referred to in Article 11, obtained by members of the cooperative from their contribution of labour and from other titles provided for in the statutes of that cooperative, whereby the revenue of members from management of the cooperative’s affairs is revenue from agricultural activity, except for running special branches of agricultural production; the provisions of paragraph 2 and 3 shall apply accordingly.
Retirement or disability pensions shall mean the aggregate amount of pension and disability benefits, together with increases and supplements, excluding family and nursing supplements and supplements for complete orphans to pensions.
The Minister of Finance shall, by regulation, specify the basic rules for keeping records in agricultural production cooperatives and other cooperatives engaged in agricultural production, for the purposes of separating income divisible under agricultural activity, except for income from running special branches of agricultural production.

Article 13
Revenue from the performance of liberal professions and other independent activity referred to in Article 10 paragraph 1 item 2 shall in particular include:
(1) revenue from personally performed activity within the scope of liberal professions, in particular doctors, all specialists, dentists, veterinarians, legal professionals, economists, auditors, architects, building technicians, patent attorneys, translators and accountants;
(2) revenue from personally performed artistic, literary, scientific, educational and journalistic activity, including participation in competitions in the field of science, culture and art and revenue from practising sports;
(3) revenue from clergy activity obtained on a basis other than an employment contract;
(4) revenue from the activity of Polish arbitrators participating in proceedings with foreign partners;
(5) remuneration received by persons performing activities connected with fulfilment of social or civic duties, regardless of the manner of appointment of these persons, excluding compensation for lost earnings;
(6) remuneration of experts to whom an organ of judicial, administrative or local government authority has assigned the performance of specific activities, and in particular remuneration of experts in court, investigation and administrative proceedings and income from participation in public-law commissions;
(7) remuneration received by persons, irrespective of the manner of appointment, belonging to the boards, supervisory boards, commissions or other governing bodies of legal persons;
(8) revenue under contracts of mandate or contracts for specific work concluded with a legal person, an organisational unit without legal personality or a natural person conducting business activity, if these services are not included in the scope of the contractor’s business activity carried on for the public.

Article 14

Revenue from business activity shall be deemed to include amounts due even if they have not actually been received, after excluding the value of returned goods, granted rebates and discounts.
Revenue from business activity also includes:
(1) revenue from the sale of all or part of assets connected with the activity, which do not constitute inventory and are not real property or rights referred to in Article 10 paragraph 1 item 8;
(2) subsidies and earmarked grants;
(3) exchange differences;
(4) contractual penalties.

Article 15
Revenue from special branches of agricultural production shall be determined according to the rules set out in Article 14 if the taxpayer keeps books proving these revenues. The taxpayer is obliged to notify the competent tax office thereof before the commencement of the tax year or before the commencement of conducting special branches of agricultural production, if it occurred during the year.

Article 16

Revenue from real property made available gratuitously in whole or in part for use by persons shall be deemed to be the rental value equivalent to the amount of rent that would be due if such property or part thereof had been leased; however, where the property is made available to persons remaining with the taxpayer in an employment relationship, for whom it constitutes a gratuitous benefit specified in Article 12 paragraph 3 item 3, this income is not determined.
If the owner uses the real property or part thereof for his own needs or the needs of family members, or makes the property or part thereof available free of charge for scientific, educational, cultural, physical culture and sports, environmental protection, charity, rehabilitation and social assistance purposes, for religious worship or for the benefit of disabled persons, no rental value is determined and expenses related to that real property do not constitute tax-deductible costs.

Article 17
Revenue from monetary capital shall be deemed to include interest on savings contributions and funds on bank accounts, interest and discount on bonds and other securities, income from participation in trust funds, and also the value of payments made from share accumulations and allocations of gratuitous or partially paid benefits, determined according to the rules set out in Article 12 paragraph 3. Revenue from monetary capital also includes revenue from the paid transfer of ownership of shares in companies having legal personality and other securities, as well as revenue from participation in trust funds insofar as it exceeds the cost of acquiring participation units, if acquisition took place by way of inheritance or donation.

Article 18
Revenue from property rights shall be deemed to include, in particular, revenue from copyrights and neighbouring rights within the meaning of separate provisions, rights to inventions, trademarks and ornamental designs, including also disposal of those rights.

Article 19

Revenue from the sale of real property and property rights and other things, under the conditions set out in Article 10 paragraph 1 item 8, is their value expressed in the price set out in the contract, reduced by the costs of sale. However, if the price, without justified cause, significantly departs from the market value of those things or rights, the revenue shall be determined by the tax office in the amount of market value.
The market value of real property and property rights and other things shall be determined on the basis of prices used in a given locality in trade in things or rights of the same kind and species, taking into account in particular their condition and degree of wear, and in trade in property rights of the same kind, as of the date of sale.
If the value expressed in the price specified in the contract significantly departs from the market value, the tax office shall call upon the parties to amend that value or indicate causes justifying a price significantly departing from market value. If no answer is given, no amendment is made, or causes are not indicated justifying a price significantly departing from market value, the tax office shall determine the value taking into account an opinion of an expert or experts. If the value so determined differs by at least 33% from the value expressed in the price, the costs of the opinion shall be borne by the seller.

Article 20

Revenue from other sources referred to in Article 10 paragraph 1 item 9 shall in particular include: amounts paid after the death of a member of an open pension fund indicated by that member to the person designated by him, cash benefits from social insurance, scholarships, grants other than those mentioned in Article 14, subsidies, rewards and other gratuitous benefits not belonging to the revenues specified in Articles 12 and 17, as well as revenue not finding coverage in disclosed sources.
Cash benefits from social insurance referred to in paragraph 1 shall be amounts paid through the employing establishment or pension authority as sickness benefits, equalising benefits, maternity benefits, care benefits and rehabilitation benefits.
The amount of revenue not finding coverage in disclosed sources referred to in paragraph 1 shall be accepted on the basis of expenditures incurred by the taxpayer in the tax year and the value of property accumulated in that year if those expenditures and values are not covered by taxed or tax-exempt revenues and resources held before.
Chapter 3
Subject-Matter Exemptions

Article 21
Income tax shall not apply to:
(1) state annuities;
(2) pensions of war and military invalids granted under separate provisions on the supply of war and military invalids and their families;
(3) compensation received under the provisions of administrative law, civil law and other statutes, except for compensation for shortening the notice period under an employment contract and severance pay paid under separate provisions concerning special rules for terminating employment relationships for reasons concerning the employing establishment;
(4) amounts received under property and personal insurance;
(5) interest on savings contributions and funds on bank accounts, except for accounts maintained in connection with the conduct of non-agricultural business activity, and dividends on securities and bonds;
(6) winnings in numbers games and totalisators conducted on the basis of authorisation of the competent state body;
(7) posthumous severance pay and funeral allowances;
(8) family and nursing benefits, upbringing benefits and maternity allowances;
(9) one-time benefits on the birth of a child paid from trade union funds;
(10) the value of official clothing (uniform) if its use belongs to the employee’s duties;
(11) the value of benefits in kind resulting from occupational safety and health regulations, including prophylactic meals and drinks, and equivalents for laundering and maintenance of work clothing and for the use of the employee’s own work clothing or for the issue of a monetary equivalent instead of work clothing, if such measures are due to the employee under separate provisions;
(12) the value of regenerative and strengthening meals and other meals issued to certain groups of workers for consumption solely during performance of work, without the right to an equivalent on this account;
(13) cash equivalents for the use by employees in the course of work of their own tools, materials or equipment;
(14) amounts received by employees as reimbursement of the costs of official transfer and settlement in connection with transfer on official business, up to 200% of the remuneration due for the month in which the transfer occurred;
(15) benefits received on account of performing active military service or forms substituting for such service;
(16) daily allowances and other amounts due for official journeys of employees up to the amount specified in separate provisions, and, in the absence thereof, under provisions applicable in state enterprises concerning official travel;
(17) daily allowances and amounts constituting reimbursement of costs received by persons performing activities connected with fulfilment of social and civic obligations — up to the amount specified in separate provisions;
(18) separation allowance and other benefits paid to employees temporarily transferred — in accordance with separate provisions for employees of state enterprises;
(19) the value of benefits borne by employing establishments on account of accommodating employees in worker hotels and quarters rented for collective accommodation, as well as the value of benefits from making residential premises available to employees employed outside their place of permanent residence;
(20) part of income of natural persons directed abroad — in an amount corresponding to the daily allowances specified in the provisions applicable in state enterprises on reimbursement of the costs of foreign official travel;
(21) board allowance paid to crews of floating vessels in exchange for free meals, up to the amount not exceeding the allowance referred to in item 18;
(22) amounts received by employees on account of the costs of use of passenger cars for the needs of the employing establishment:
(a) for official journeys outside the locality — up to the amount determined by applying the rate for one kilometre of vehicle mileage,
(b) for local journeys — up to the amount of the monthly cash lump sum or up to the amount not exceeding the rates per one kilometre of mileage, specified in separate provisions applicable in state enterprises;
(23) amounts from social assistance funds and company housing funds paid to reduce housing expenses according to the rules set out in separate regulations of the Minister of Labour and Social Policy;
(24) assistance for foster families;
(25) energy allowance for combatants;
(26) social assistance benefits and aid from workplace social benefit funds and from trade union funds in the event of individual random events, natural disasters, prolonged illness or death;
(27) benefits received under separate provisions:
(a) vocational, social and medical rehabilitation of disabled persons from the State Fund for the Rehabilitation of Disabled Persons and from company rehabilitation funds,
(b) aid to former combatants and other entitled persons and members of their families from the State Fund for Combatants;
(28) revenue obtained from the sale of all or part of real property forming part of an agricultural holding; the exemption does not concern revenue from the sale of land which, in connection with that sale, lost its agricultural or forest character;
(29) revenue obtained by way of compensation paid under provisions on expropriation of real property or by way of sale of real property for purposes justifying expropriation, and by way of sale in connection with exercise of the pre-emption right under the provisions on land management;
(30) revenue obtained by way of sale of the right of perpetual usufruct and real property acquired appropriately under the provisions on land management and expropriation of real property, for exchange for property left abroad;
(31) revenue obtained by way of sale of real property or the right of perpetual usufruct under the provisions on environmental protection and shaping;
(32) revenue obtained by way of sale of buildings or their parts, shares in real property, residential premises constituting separate real property, land, the right of perpetual usufruct, cooperative ownership right to residential premises and rights resulting from the allocation by housing cooperatives of a single-family house or premises in a small residential building:
(a) in part spent, not later than within the year of sale and the year following the year of sale, on acquisition of another building or part thereof, residential premises constituting separate real property, land, the right of perpetual usufruct, a housing cooperative right or rights resulting from the allocation by a housing cooperative of a single-family house or premises in a small residential building, on construction, extension or reconstruction, or on renovation of one’s own building or residential premises; the exemption also applies in the case of spending on acquisition of land, the right of perpetual usufruct, construction, extension or renovation of a building or part thereof intended for recreational purposes,
(b) in whole — if the sale took place for the purpose of obtaining in return another real property or right, a cooperative tenant’s right to premises or a building or residential premises occupied on the basis of an administrative decision on allocation of premises or building,
(c) in whole — if the sale took place in connection with execution or in connection with a multi-unit building replacement for premises;
(33) income of natural persons specified in Article 3 from sources of revenue situated outside the territory of the Republic of Poland, if an international agreement to which the Republic of Poland is a party so provides;
(34) part of income on account of participation in a company having legal personality with its seat in the territory of the Republic of Poland, expended on acquisition of shares of the State Treasury or on the purchase of bonds issued by the State Treasury;
(35) income from non-agricultural business activity of disabled persons within the scope and on the principles laid down in the Act on the employment and vocational rehabilitation of disabled persons;
(36) income from running non-public schools within the meaning of the provisions on development of the education system and upbringing, to the extent that such income was spent for school purposes in the tax year.

The provision of paragraph 1 item 32 shall not apply if the construction and sale of buildings and premises is the object of the taxpayer’s business activity.
The Minister of Finance, in agreement with the Minister of National Education, shall specify, by regulation, the types of expenditures which may be deemed school-purpose expenditures within the meaning of paragraph 1 item 36.
Chapter 4
Costs of Obtaining Revenue

Article 22

Costs of obtaining revenue from a particular source are all costs incurred in order to achieve revenue, except for the costs listed in Article 23. Costs incurred in foreign currencies shall be converted into zlotys according to the exchange rates on the date of incurring them, announced by the National Bank of Poland and applied in the sale of currencies.
The costs of obtaining revenue from service relationship, employment relationship, cooperative employment relationship and outwork are specified in the amount of 3% of the revenue received, not more, however, than one-tenth of the first bracket amount referred to in Article 27 paragraph 1 annually.
Costs of obtaining revenue other than those listed in paragraph 2 include also:
(1) depreciation write-offs on fixed assets and on intangible and legal assets, as well as losses resulting from liquidation due to wear or destruction of fixed assets not fully amortised;
(2) partial or total losses in fixed assets and in working assets caused by random events, losses after deduction in the amount not covered by insurance compensation;
(3) expenses for research and development and experimental works, including those completed with a negative result, expenses for standardisation and for developing assessments of inventions;
(4) remuneration of the creators of inventions, rationalisation projects and utility models, and awards related to those projects;
(5) interest on liabilities, including loans, and durable charges if they remain connected with the source of revenue, except those specified in Article 23 items 10, 11 and 13;
(6) taxes and fees and insurance contributions remaining in connection with the source of revenue, except those listed in Article 23 item 7;
(7) expenses incurred by employers directly for employees if they result from collective agreements, labour regulations or other binding acts;
(8) contributions to social and housing funds made on the terms and in the amounts laid down in separate provisions on company social and housing funds;
(9) receivables recognised as uncollectible and reserves created to cover receivables the uncollectibility of which was made probable, as well as other reserves, if the obligation to create them and charge them to costs results from separate provisions;
(10) advertising expenditures in the mass media or publicly in another way;
(11) costs of representation and advertising conducted in a different manner than specified in item 10 — up to the amount of 0.25% of revenue;
(12) exchange differences for persons conducting business activity;
(13) other expenditures, if the obligation to bear them as costs is provided for by separate laws.
Costs of obtaining revenue, subject to paragraphs 5 and 6, shall be deducted only in the tax year in which they were incurred.
In taxpayers keeping accounting books, commercial books or tax books of revenue and expenses, costs shall be deducted only in the tax year to which they relate, provided they were recorded in books before preparation of the financial statement or annual declaration and concern revenues of that tax year and are specified as to type and amount, even if not yet incurred, unless recognising them in this manner was impossible; in that case they are deducted in the year in which they were incurred.
The rule laid down in paragraph 5 also applies to taxpayers keeping tax books of revenues and expenditures, provided that in each tax year they consistently keep books in a way enabling the separation of costs of obtaining revenue relating only to that tax year.
Certain components of assets recognised as fixed assets, values and rights, and inventories, shall be valued according to the rules laid down in separate provisions for the purposes of corporate income tax.
The Minister of Finance shall, by regulation, specify, in relation to taxpayers not obliged to keep accounting books, the manner of determining initial value and recording fixed assets, as well as intangible and legal assets.
Costs of obtaining certain revenues shall be determined as a percentage of revenue:
(1) from payment for transfer of the right of ownership of an invention, trademark or ornamental design — 50%;
(2) from licence fees for transfer of the right to use an invention, trademark or ornamental design received in the first year of licence duration or the first unit under a licence agreement concluded — 50%;
(3) for the use by creators of copyrights and performers of neighbouring rights — 50%;
(4) in the cases specified in Article 13 items 2, 4, 6 and 8 — 20%.
If the taxpayer proves that the costs of obtaining revenue were higher than those resulting from the percentage norm set out in paragraph 9, the costs shall be taken in the amount actually incurred.

Article 23
The following shall not be deemed costs of obtaining revenue:
(1) expenditures on acquisition of land or the right of perpetual usufruct of land, and expenditures on acquisition or creation of fixed assets and intangible and legal assets on one’s own behalf, if those assets and values are subject to depreciation write-offs; however, such expenditures constitute costs in determining income from sale of things specified in Article 10 paragraph 1 item 8 letter (d), due to the time of incurrence;
(2) expenditures incurred on rent under lease or hire agreements for fixed-term use with a right of purchase, and by the lessor on acquisition of the leased item, in the part constituting repayment of the item’s value, if the lessor or hirer makes depreciation during the lease term;
(3) write-offs and contributions to various kinds of funds unless the obligation or possibility of creating them at the taxpayer’s cost or making payments for them results from separate statutes;
(4) expenditures on repayment of liabilities, including loans, and on redemption of capital remaining in connection with the source of revenue;
(5) interest on the taxpayer’s own capital inserted into the source of revenue;
(6) donations and offerings of all kinds;
(7) income tax, inheritance and donation tax and turnover tax on excessive shortages of products and culpable losses of products;
(8) one-time compensation on account of accident at work and occupational disease and additional insurance contribution in the event of deterioration of working conditions;
(9) enforcement costs connected with non-performance of obligations;
(10) fines and pecuniary penalties adjudicated in criminal, fiscal-criminal and administrative proceedings and interest on those penalties;
(11) penalties, fees and compensation and interest thereon on account of:
(a) non-observance of environmental protection regulations,
(b) failure to comply with orders of competent authorities concerning control and supervision over occupational safety and health;
(12) liabilities written off as time-barred;
(13) interest for late payment of liabilities to which the provisions of the Tax Ordinance apply;
(14) contractual penalties on account of defects in delivered goods, performed works and services and delay in delivery of defect-free goods or delay in removal of defects in goods or performed works and services;
(15) costs of obtaining revenue from sources situated in the territory of the Republic of Poland or abroad if income from those sources is in general not subject to tax or is exempt from income tax.

Chapter 5
Special Rules for Determining Income

Article 24

In taxpayers who, under applicable accounting rules, prepare a balance sheet and a profit and loss account, income from business activity shall be the income shown on the basis of correctly kept books, reduced by income free from taxation and increased by expenditures not constituting tax-deductible costs but previously charged to costs of obtaining revenue.
In taxpayers earning revenue from business activity and keeping tax books of revenue and expenses, income from that activity is the difference between revenue within the meaning of Article 14 and the costs of obtaining revenue, enlarged or reduced by the difference between the value of closing and opening inventories of commercial goods, basic and auxiliary materials, semi-finished products, work in progress, finished products, shortages and waste, if the value of the closing inventory is higher than the value of the opening inventory, or reduced by the difference between the value of the opening inventory and the value of the closing inventory, if the value of the opening inventory is higher. Income or loss from sale of fixed assets related to business activity is the difference between the revenue obtained from sale and the initial value shown in the register of fixed assets maintained for the purposes of depreciation, increased by the amount of depreciation write-offs made.
In the event of notification to the tax office of liquidation of business activity, income shall be determined on the day of liquidation — according to the value as of the date of liquidation of commercial goods, materials, semi-finished products, finished products, shortages and waste — such tax value as results from the share of costs in revenues in the last three months preceding the month in which liquidation occurred, or in the preceding year.
Income from special branches of agricultural production is income from unit area of crops or livestock production expressed in quantitative scales of the increase in animals at the end of the tax year as compared with the condition at the beginning of the year, reduced by the value of shortages in that herd during the tax year, if the taxpayer does not keep the books referred to in Article 15; in that case estimated norms of income from a specified area of crops or production unit shall apply.
Income from participation in the profits of legal persons is the income actually obtained from that participation and income intended to increase share capital.
Income from the sale of things specified in Article 10 paragraph 1 item 8 letter (d), if sale took place before the lapse of half a year from acquisition, is the difference between the revenue from sale and the cost of acquisition, reduced by the costs of sale and increased by the value of expenditure made during the possession of the thing.
The Minister of Finance, in agreement with the Minister of Agriculture and Food Economy, shall specify by regulation the estimated norms of income referred to in paragraph 4.

Article 25

If:
(1) a taxpayer remaining in economic relations with a person having its seat or place of residence abroad arranges the course of its interests in such a way that it shows no income or shows lower income than would be expected if those relations did not exist; or
(2) the taxpayer uses his economic links with a person enjoying special tax reliefs, or performs services for another taxpayer under conditions differing from those which independent entities would apply in the place and time of providing those services, or by using a relation or aid from another taxpayer and as a result of that shows no income or shows income lower than would be expected if such relation did not exist or if those services had not been rendered,
— then, if the income cannot be determined on the basis of accounting books, income shall be determined by estimation.
The provision of paragraph 1 applies accordingly where the taxpayer uses his economic relationship with a person enjoying special tax reliefs, or performs services for another taxpayer on conditions differing from those that unrelated entities would have applied at the time and place of performance, or uses a relation or aid of another taxpayer, and as a result of that does not show income or shows income lower than would be expected if the mentioned relationship did not exist or if the mentioned service had not been rendered.
Chapter 6
Basis of Tax Computation and Amount of Tax

Article 26

The basis for calculating tax, subject to Articles 27, 28, 29, 30 and 41 paragraph 3, is income determined in accordance with Articles 9, 24 or 25 after deduction of:
(1) donations for scientific, scientific-technical, educational, cultural, physical culture and sport, environmental protection, charity, health protection and social rehabilitation of invalids and social assistance of up to 10% of income — to the extent exceeding 10% of income — without limitation if it results from separate statutes; the deduction does not apply to donations for natural persons and legal persons and organisational units without legal personality which pursue the mentioned objectives in connection with economic activity, and to natural persons for whom such donations constitute their personal income;
(2) social insurance contributions of the taxpayer and persons cooperating with the taxpayer, as well as contributions to other sickness funds, paid directly by the taxpayer, if the obligation to pay them results from separate provisions;
(3) rent and other permanent burdens based on titles in rem which do not constitute tax-deductible costs, and alimony, except for alimony for children, in the amount established in the alimony judgment;
(4) contributions to organisations to which membership of the taxpayer is compulsory;
(5) expenditure for the taxpayer’s housing purposes, allocated to:
(a) purchase of land or the right of perpetual usufruct of land for construction of a residential building,
(b) purchase of a residential building or residential premises,
(c) contribution to the housing cooperative for a residential contribution, except for the contribution resulting from transformation of a cooperative tenant’s right into a cooperative ownership right to the premises,
(d) purchase of a residential building or residential premises from persons who built that building within their business activity,
(e) extension and superstructure of a residential building,
(f) conversion of attic, drying room or other room for residential purposes,
(g) renovation and modernisation of a residential building or premises;
(6) expenses for construction of one’s own multi-family residential building intended for the residential premises located therein or expenditure on purchase of a plot for construction of such a building;
(7) expenditure borne by the taxpayer for paid professional training of pupils up to the amount of twenty times the average monthly remuneration in the national economy within the meaning of Article 27 paragraph 3 of the Act;
(8) expenditure on rehabilitation and expenses connected with facilitating the performance of life activities borne by a disabled taxpayer or a taxpayer supporting a disabled person.
Expenditures for the purpose specified in paragraph 1 item 5 letter (a) shall be deductible from income in the amount actually incurred in the period of application of the Act, not exceeding the product of 350 square metres and the price of 1 square metre of land or perpetual usufruct right to land on the date of acquisition.
The total amount deducted for expenditures actually incurred for the purposes set out in paragraph 1 item 5 letters (b)–(e), in the period of application of the Act, may not exceed the amount constituting the product of 70 square metres of usable floor area and the indicator of the average cost of completion of 1 square metre of usable floor area of a residential building, determined for the purpose of calculating the guaranteed premium from savings contributions for the third quarter of the year preceding the tax year.
The total amount deducted for expenditures actually incurred for the purposes specified in paragraph 1 item 5 letters (f) and (g), in the period of application of the Act, may not exceed one-fifth of the amount referred to in paragraph 3. The deduction shall be applied if renovation or modernisation expenses were incurred in the tax year at least in the amount of 0.2 of the amount referred to in paragraph 3.
The amount of deductions for expenditures actually incurred for the purpose specified in paragraph 1 item 6 may not exceed the equivalent of the product of the amount referred to in paragraph 3 and the number of premises intended for rental.
The amount of expenditure for the purposes set out in paragraph 1 item 5 shall be established on the basis of documents confirming that they were incurred.
The expenditure referred to in paragraph 1 item 5 shall be deductible if the expenditure does not constitute a tax-deductible cost and has not been refunded to the taxpayer in any form.
Spouses shall be taxed separately and if they incur expenditure for the purposes set out in paragraph 1 item 5, expenditure shall be deducted in the amount set out in paragraphs 2–5 from the income of each spouse in such ratio as the income of the spouse remains to the joint income of both spouses.
Expenditures referred to in paragraph 1 item 5 and item 6 which did not find coverage in the taxpayer’s annual income shall be deductible from income earned in the following years until full deduction, within the periods specified in paragraphs 2–5.
If the taxpayer or his spouse received a bank or workplace credit or loan for the purposes specified in paragraph 1 item 5 and item 6, the amounts spent for those purposes shall be reduced by the amount of that credit or loan, and the deductions shall include repayments of that credit or loan together with interest in the years in which such repayments are made.
The Minister of Finance shall announce, by notice published in the Official Gazette of the Republic of Poland “Monitor Polski”, by 31 December each year, the amounts referred to in paragraphs 3, 5 and 7.
The Minister of Finance, in agreement with the Minister of National Education, shall by regulation specify the types of expenditures referred to in paragraph 1 item 7 and the rules and conditions for their deduction from income.
The Council of Ministers may, by regulation, specify additional investment expenditures serving economic activity, as well as expenditures on rationalisation of energy carriers and on purchase and installation of an electricity meter and water meter, and also the rules and conditions for their deduction from income.
The Minister of Finance, in agreement with the Minister of Labour and Social Policy, shall by regulation specify the types of expenditures referred to in paragraph 1 item 8 and the rules and conditions for their deduction from income.

Reference: https://eli.gov.pl/eli/DU/1998/887/tj