The so-called return relief, introduced as part of the Polish Deal, provides a PIT exemption for individuals who have lived and worked abroad and decided to return to Poland. The exemption is available only if certain conditions are met and applies up to PLN 85,528. To benefit from the relief, taxpayers need to properly assess their tax residency and keep documentation confirming their stay abroad.
What is the return relief?
The return relief provides a PIT exemption for certain revenues earned in four consecutive tax years by individuals who moved their place of residence to Poland after 31 December 2021.
Who is eligible for the return relief?
The return relief is available to a taxpayer who meet all of the following conditions:
- as a result of relocating their place of residence to Poland, is subject to unlimited tax liability, and
- did not have the place of residence in Poland: for at least 3 calendar years immediately preceding the year of return and from the beginning of the year to the day preceding the day on which he returned to Poland, and
- hold Polish citizenship, a Pole’s Card (Kartę Polaka) or citizenship of another European Union Member State or a country belonging to the European Economic Area (EEA) or the Swiss Confederation, or has place of residence continuously:
- for at least 3 years in a European Union Member State or state belonging to the EEA, 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 Poland for at least 5 calendar years preceding the three-year period, and
- has a certificate of residence or other documents proving their tax residence abroad for the period required to confirm eligibility for the relief, and
- has not previously claimed the return relief, either in whole or in part (if they are returning to Poland for a second time).
Check if you are qualified for the return relief!
If the answer to the above questions is “YES”, there is a high probability that you qualify for the relief. |
What revenues benefits from the exemption?
The return relief applies to, among others, the following types of revenues:
- from employment relationship, service relationship, home-based work and cooperative employment relationship,
- from mandate agreements,
- from non-agricultural business activity (taxed under the scale, 19% flat-rate tax, the IP Box regime or a lump-sum tax on registered revenue),
- from maternity benefits.
The relief does not apply to revenues obtained on the basis of business management agreements, management contracts or agreements of a similar nature.
The exemption is limited in amount and covers revenues up to the amount not exceeding PLN 85,528 in a tax year.
The PLN 85,528 is the total limit for the return relief, relief for young workers, for families 4+ and for working seniors.
When can the return relief be used and for how long?
The exemption is available for four consecutive tax years, counting from:
- the beginning of the year in which the taxpayer moved his place of residence to Poland, or
- the beginning of the year following the year of return.
The return relief can be used already during the tax year at the stage of calculating tax advances. The final settlement of the relief is made in the annual return.
If the payer of PIT advances is the employer/principal – in order to benefit from the relief – an appropriate statement must be submitted to the payer that the conditions for applying the exemption are met. The statement must also indicate the start and end years for the application of the exemption by the payer.
How to prove residence abroad?
The tax authorities may ask taxpayers to demonstrate that they are entitled to claim the return relief.
The right to the relief can be supported by various documents, including:
- a tax residence certificate issued by a foreign tax authority,
- other documents confirming residence abroad, such as employment contracts, tenancy agreements, utility bills or foreign tax returns.
Proper documentation is important, as the tax authorities may verify whether all conditions for the relief have been met.
The return relief may result in significant tax savings. However, eligibility must be assessed carefully. An incorrect determination of tax residence or insufficient supporting documentation may lead to the loss of entitlement to the relief.
If you have any questions or doubts related to the return relief, please contact us!
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