26 Feb 2025
Poland, a vibrant country in Central Europe, has become an attractive destination for many Sri Lankans. It provides better employment opportunities, education, and a higher standard of living. With this relocation, however, comes the responsibility of understanding and complying with Polish tax laws, which might often seem overwhelming to newcomers.
This article will explore the tax responsibilities that Sri Lankans living in Poland need to know, helping them understand their obligations and how to manage their finances while abiding by their Polish laws. Additionally, many Sri Lankans regularly send money to Sri Lanka from Poland to support their families back home.
Before discussing specific tax responsibilities, it's essential to understand the fundamentals of the Polish tax system. Poland follows a progressive tax system, meaning the higher the tax rate, the more you earn. The Polish government collects taxes for various purposes, including social security, health insurance, and infrastructure development.
Taxpayers in Poland are subject to different income tax brackets based on their earnings. There are also various deductions and allowances available to reduce taxable income. Employers typically withhold income tax and social security contributions from salaries. Understanding these key aspects can help individuals and businesses comply with tax regulations while optimizing their financial planning.
Here are the primary taxes that individuals and businesses in Poland must pay:
The tax was levied on individuals' income. As a resident of Poland, you will be subject to PIT on worldwide income.
A consumption tax is imposed on goods and services, typically ranging from 23% for most items.
This includes contributions to pension, health, and unemployment insurance, which are mandatory for employees in Poland.
If you start a business in Poland, you will be subject to CIT on business profits.
For tax purposes, individuals are considered residents of Poland if they meet one of the following criteria:
If you qualify as a tax resident in Poland, you must report your worldwide income to the Polish tax authorities.
As a Sri Lankan expat in Poland, understanding your tax obligations is essential to avoid legal issues and penalties. Let’s break down the essential tax responsibilities you need to consider.
As a tax resident of Poland, you must report all income earned worldwide. This includes income from employment, self-employment, rental properties, investments, and other sources. The Polish tax system ensures that expats are taxed on global income, so you should keep track of all sources of income and file an annual tax return.
Additionally, if you send money online to Sri Lanka from Poland, you must be aware of any tax implications related to international transactions. Ensuring compliance with Polish tax laws while managing your finances efficiently can help you avoid legal challenges and optimize your financial planning.
The deadline for filing your annual tax return in Poland is typically by the end of April, following the tax year (January 1st to December 31st). You can file your tax return online via the Ministry of Finance’s portal or by visiting a local tax office. The amount of tax you owe will depend on your total income and applicable tax deductions.
There are two main PIT rates in Poland:
As an employee in Poland, you must pay mandatory social security contributions, which cover pension, health insurance, and unemployment benefits. Your employer deducts these contributions directly from your salary.
However, if you are self-employed or a freelancer, you must make these contributions independently. The rates for social security contributions can vary based on income but are typically around 13% to 15% of your earnings.
Poland offers several tax deductions and credits that can reduce your taxable income. These include deductions for:
You can deduct up to 7.75% of your health insurance contributions from your taxable income.
Charitable donations to registered charities can be deducted from your taxes.
Certain expenses related to your job, such as travel, can be deducted.
If you have children, you may be eligible for a child tax credit.
Make sure to maintain proper records and receipts to claim these deductions.
Poland and Sri Lanka have signed a tax treaty to avoid double taxation. This means that if you are paying taxes in one country, you may not have to pay taxes on the same income in the other country. However, you may need proof of taxes paid in one country to benefit from this treaty.
If you are a Sri Lankan citizen living and working in Poland, you can avoid paying taxes on the same income in both countries by using the provisions of the tax treaty. The treaty ensures that you only pay tax on your income in one country, and it might allow you to claim a credit for foreign taxes paid.
For example, if you earn income from Poland and Sri Lanka, you will likely only pay taxes in Poland as a resident, and any taxes paid in Sri Lanka may be used as a credit to offset your Polish tax liability.
To make an online money transfer from Poland to Sri Lanka, it’s essential to understand the tax implications. While Poland doesn’t typically tax international remittances, the source of the funds and your residency status can impact the transaction.
Sri Lankans in Poland may need to consider:
If you're sending money as income, ensure you have already paid taxes in Poland.
Whether you choose to send money online to Sri Lanka from Poland or use a traditional method, using services like ACE Money Transfer ensures a seamless transfer. Still, it's essential to keep track of any fees involved. Fees might vary depending upon the service, and you should factor them into your financial planning.
If you plan on sending money frequently from Poland to Sri Lanka, consider using cost-effective and efficient online money transfer services.
As a Sri Lankan living in Poland, staying on top of your tax responsibilities is vital for avoiding potential legal complications and ensuring financial well-being. Understanding the Polish tax system, staying compliant with income reporting, making social security contributions, and knowing your tax obligations for sending money home are all essential components of your financial life in Poland.
With the right knowledge and tools, such as using efficient money transfer services like ACE Money Transfer, you can manage your finances to support your life in Poland and your commitments back home in Sri Lanka. If you want to send money online to Sri Lanka from Poland, choosing a secure and cost-effective service will ensure that your transactions are fast, reliable, and compliant with financial regulations.
Poland's income tax rate is 17% for income up to PLN 120,000 and 32% for income exceeding that threshold.
If you are a tax resident in Poland, you must report and pay taxes on your global income, including any income from Sri Lanka.
You can deduct health insurance contributions up to a specific limit, reducing your taxable income.
No, there are no specific limits on sending money abroad, but you must ensure taxes are paid on the income before sending it.
Using an online money transfer service like ACE Money Transfer ensures you can send money online to Sri Lanka from Poland quickly and with low fees.
