October 21, 2021

Biology Reporter

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A blow to the self-employed.  Will they look to improve taxes?

A blow to the self-employed. Will they look to improve taxes?

As politicians in the United Right camp argue, the Polish deal is to exempt 18 million Polish women and men from taxes. However, there is a group that will “get rid” of this group. It’s over 60 percent. Self-employed people who will pay higher taxes. Some of the richest Polish and Polish women may decide to change their tax residency and escape high taxes.

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The Polish deal is a program that, according to the ruling camp, aims, among other things, to help the Polish economy adapt to the effects of the epidemic. The announcement of the document has been delayed several times including. Because of the outbreak of the extremely dangerous third wave of the pandemic and coalition frictions. The name itself is well known – New Deal – it was after all a package of reforms introduced by US President Franklin Delano Roosevelt in 1933-1939, which helped America recover from the Great Global Crisis of 1929-1933. The name of the show “New Hope” also refers to the United States, but in pop culture. According to the United Right, 18 million Polish women hope to cut taxes, but there are social groups that have to pay more.

The Polish deal will bring about a financial revolution. Yaroslav Kaczynski’s new tax plan rests on three pillars. The – long-awaited – announcement of raising the second tax limit – from 85 thousand. Up to 120 thousand PLN. PiS also wants to increase the free amount to 30,000 PLN. This is a surprising change – experts have forecast an increase from the current 8,000. MAXIMUM 15000 PLN.

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The third – most controversial – component of the Polish system is the elimination of the possibility of deducting health insurance fees in a PIT Settlement. Today is 9 per cent. Premiums of up to 7.75 percent can be deducted from our tax.

In addition, the contribution must always be calculated proportionally to the income and it will not be possible to use the flat rate model, which is now done by people who manage a sole proprietorship. In 2021, it is 382 PLN. For people whose income is over 10,000. Total zloty, the increase in premiums could be doubled.

According to data from the Central Statistical Office, at the end of April, more than 2.5 million Polish and Polish women were running a business.

– The Ministry of Finance directly confirms that only about 40 percent will benefit from Polish Lada. self employed. That means the remaining 1.5 million people will have to pay higher taxes – comments Maciej Uniszuk, from law firm Oniszczuk & Associates, specializing in business legal and tax advice or establishing companies in Poland and abroad.

Those who earn 6000 max will benefit. Total zloty. Those who earn the most will lose.

In addition, President Kaczyński confirmed the desire to dispose of so-called “garbage trucks” and to introduce a single employment contract. Sole proprietorship does not fit directly into this, but the Polish deal solutions aim to encourage a transition to an employment contract for those with higher profits. For years, I’ve been telling clients that a bigger company in business means problems protecting property against debt, succession, and ZUS. Now it will also become tax unprofitable – Oniszczuk adds.

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The Law and Justice Party would like to encourage Polish immigration to return, because the draft assumes that from 2022 it will be possible to set the taxable amount less by 50,000. PLN, and in the following tax base it will be 50% less. Some migrants may return, but another group may leave Poland.

Some of the Polish deal proposals appear to be mutually exclusive. By raising taxes, many rich people will look for solutions to improve taxes and leave the country – Maciej Oniszczuk argues.

One method might be another country’s tax residency, although this is not an available solution for everyone who is self-employed, Oniszczuk notes. First, in order to stop being a Polish tax resident, just not being in the country for 183 days is not sufficient. An important evaluation criterion is also a matter of so-called center of life interests. A family residing in the country or owning real estate may be arguments for the tax office that the center – despite the fact that the taxpayer is not in the home country – is still in Poland.

– Accommodation is also costs, for example, renting a property, taking care of living in a new place, or paying for costs related to legal services – law firm expert Oniszczuk & Associates enumerates.

Host country requirements must also be met. For example – a programmer who wants to work in Cyprus must stay there for at least 60 days, manage a company or employ, in addition to renting a property and making sure that he does not obtain another tax residence, for example by residing in Poland in order to 183 days.

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After that, the single person company LTD that manages may reduce the tax under the IP BOX to 2%, and the shareholder’s profits are exempt from tax. This means that the global income tax for our IT professional will come to 2 percent. – Oniszczuk ends.
Currently, in addition to Cyprus, Malta and Portugal, it offers the best conditions for obtaining tax residency.