NAVIGATION
Joint settlement with spouse
First, let us recall that joint settlement with a spouse is only available in the case of taxation of business on general principles, i.e. according to the tax scale, and additionally, the spouse cannot simultaneously use taxation at a flat rate or lump sum. Nevertheless, there is an exception for rental income, which does not exclude joint settlement for non-rental income, i.e. subject to the tax scale.
Joint taxation of spouses' income in Poland is subject to several conditions:
- Tax residence
Both spouses should have their place of residence for tax purposes in Poland, where the center of their professional, family and social life is concentrated. For those who left Poland for a longer period in 2024, an individual analysis is necessary to determine whether they still meet the criteria for Polish tax residence.
However, the legislator has provided exceptions to this requirement. Spouses who have their place of residence for tax purposes in another Member State of the European Union, the European Economic Area or the Swiss Confederation, as well as spouses of whom one is subject to Polish taxation and the other lives in another country, may be entitled to joint settlement.
In both cases, there are additional conditions. The first is that their income subject to taxation in Poland must together constitute at least 75% of their total income in a given tax year. In addition, spouses must attach to their tax return a foreign certificate confirming tax residence in a given country.
It is also important that the income taken into account for joint settlement includes income from all sources, regardless of their place of origin, even if they are exempt from taxation. Additionally, it is important to have a legal basis resulting from a double taxation treaty or other international treaties ratified by Poland, allowing the tax authority to obtain information from the tax authority of the country where the spouses have their place of residence for tax purposes.
- Maintaining the marital bond and community of property
A necessary condition for joint settlement with a spouse is maintaining the marital relationship and community of property throughout the tax year or from the date of marriage to the last day of the tax year if the marriage was concluded during that period.
People who get married during the tax year, even on its last day, have the option of jointly settling their income for the entire year.
The default assumption after entering into marriage is community of property, but spouses can change it by agreement. It is worth noting, however, that signing an agreement on the separation of property (prenuptial agreement) between spouses prevents the use of tax preferences related to joint settlement of PIT.
As for the limitation or extension of community of property, this does not result in the establishment of separation of property. The limitation or extension of community of property therefore does not affect the possibility of joint tax settlement of spouses.
It is worth noting that joint settlement with a spouse is also possible if one of the spouses died during the tax year or after the end of the tax year but before filing a tax return for that period.
- Failure to apply preferential tax regime
Another important condition is that neither spouse applies the provisions of the 19% flat tax or the Act on flat-rate income tax on certain income earned by individuals (with the exception of the provisions on income from rental/lease conducted outside business activity) in a given tax year. This includes all aspects related to the income earned in a given tax year, incurred costs of obtaining income, liabilities, rights to increase or decrease the tax base and other additions or deductions.
In practice, this means that if either spouse has opted to have their business income taxed at a flat 19% tax rate or has opted for lump sum taxation, but has not generated any income from this business in the 2024 tax year, they will still be entitled to joint tax settlement with their spouse.
In addition, neither spouse should be subject to taxation under the Tonnage Tax Act or the Shipbuilding and Complementary Industries Activation Act. These restrictions are intended to ensure that any special tax regimes applied by spouses do not interfere with the possibility of joint settlement of income tax.
- Submitting an application for joint income taxation
The last condition for joint settlement of spouses' income is the expression of such a desire by taxpayers in their tax return for the previous year.
To do this, mark the appropriate box on the first page of the tax return form and make sure that the document is signed by both spouses (or one spouse, if the other spouse dies before the date of filing the tax return).
Accurate indication on the tax return form is crucial to expressing the desire to use the joint marital settlement.
In both cases, it is important that the document is signed by both spouses or one, depending on the situation (if the other spouse died before filing the return).
An important step for spouses or a spouse who does not have a place of residence in Poland for tax purposes is to enter information in the tax return regarding the attached tax residence certificates.
It is worth remembering that tax residency certificates are documents issued by foreign tax administrations. These documents confirm that a given person should be treated as a tax resident of a given country for a specific period.
In the case of spouses or a spouse who does not have a place of residence in Poland for tax purposes, attaching tax residence certificates is important because it provides the tax authority with information on the tax status of the spouse - a resident of another country. This information is crucial for correct tax settlement and avoiding double taxation.
What is a joint marital tax return?
A joint tax return for married couples involves adding up the income of the spouses and calculating a joint tax liability. This is especially beneficial in situations where there are significant disparities in the income of the spouses, which allows for better use of lower tax rates and the amount reducing the tax. Here is the process for this return:
- Each spouse separately reduces his or her income by the costs of obtaining the income and deductions from income.
- Spouses add up their incomes (after deductions) and divide the result by two.
- They then calculate the tax according to the tax scale, reducing it by the tax reduction amount.
- The final tax liability results from multiplying the resulting value by two.
Joint filing with a spouse is particularly beneficial when there are significant differences in the income of the spouses or when one of them has no income at all. Examples illustrate how joint filing can lead to tax savings.
It is worth noting that spouses, even after filing individual tax returns by April 30, can use the joint marital return by filing an amendment to the tax return together with a request for recognition of overpayment. This allows you to reduce your tax liabilities, even if you originally filed individual returns.
Settlement together with the child
Similarly to the case of joint settlement with a spouse, joint settlement with a child is also available only in the case of taxation of the business on general principles, i.e. according to the tax scale, and additionally, the spouse cannot simultaneously use the flat rate or lump sum taxation. However, there is an exception for rental income, which does not exclude joint settlement for non-rental income, i.e. subject to the tax scale.
To benefit from the opportunity to file a joint tax return as a single parent with a child, certain conditions must be met.
Single parent status:
In the tax return, a single parent who is single, unmarried, widow, widower, divorcee, divorced, separated or married, if their spouse has been deprived of parental rights or is serving a prison sentence, may take advantage of tax preferences. It is important that these conditions do not have to be met throughout the year - one day of the year in which the person is raising a child alone is enough.
Single parent status:
- minors,
- are of legal age and receive a care allowance (supplement) or a social pension, in accordance with separate regulations,
- adults up to 25 years of age, studying in specific schools.
Tax residence criterion:
The taxpayer must be subject to unlimited tax liability in Poland or have a place of residence in another country of the European Union, the European Economic Area or the Swiss Confederation, generating income subject to taxation in Poland in the amount of at least 75% of the total income. Place of residence outside Poland must be documented by a certificate of residence issued by foreign tax authorities.
It should be remembered that taxpayers residing in a European Union, European Economic Area or Swiss Confederation country other than Poland are obliged, at the request of the tax authorities, to document the amount of total revenues achieved in a given tax year by presenting a certificate or other document issued by the competent authority of the country of residence confirming the amount of total revenues obtained in a given tax year.
Child Income Conditions:
In order to benefit from preferential tax rules for single parents, it is important that the child does not reach the age of:
- income, except for survivors' pensions, which are subject to taxation according to the tax scale or capital income taxed at 19% income tax, in accordance with Article 27 or Article 30b of the Personal Income Tax Act, or
- revenues referred to in Article 21 paragraph 1 point 148 and point 152 of the Personal Income Tax Act, i.e. revenues covered by the so-called relief for young people and the so-called return relief.
In addition, the total amount of these incomes should not exceed twelve times the amount of the social pension, established in accordance with the Social Pension Act. This amount applicable in 2024 was PLN 21.
No possibility of settling taxes together with the child
People who jointly raise at least one child with the other parent or legal guardian will not be able to take advantage of the possibility of joint settlement of tax obligations with the child, including situations of alternating care where both parents receive the child-raising benefit, known as "800+".
The concept of "joint parenting" has not been precisely defined by the legislator, which makes it difficult to determine whether it covers only alternating care or whether it can also be interpreted as a situation where divorced parents take the child on holiday once a year.
A person who is taxed in the form of a flat tax, tax card, lump sum tax on recorded income (except for income from private rental), tonnage tax, or under the Act of 6 July 2016 on the activation of the shipbuilding industry and complementary industries will also not be able to take advantage of the possibility of joint settlement with a child.
How to file a tax return for your child
In order to benefit from preferential taxation available to single parents, it is necessary to indicate the intention to do so in the tax return form for the previous year.
If you are a parent and do not have a place of residence in Poland for tax purposes, you should also ensure that you complete the section containing information regarding any attached tax residence certificates on the relevant tax form.
What is the settlement of a single parent's tax return?
In the case of joint taxation with a child, the tax is determined at double the tax amount calculated on half of the income of the single parent. Such a settlement allows for double consideration of the amount reducing the tax, which is analogous to the benefits resulting from joint taxation of spouses.
Joint tax return for a single parent with a child is beneficial because the so-called tax-free amount is as much as PLN 30, and the lowest tax rate is 12%. Thanks to this, by using this type of settlement, you can double-use the "tax-free amount" and the lower tax rate, which translates into lower tax to pay.
Relief for working seniors
Entrepreneurs have gained the opportunity to take advantage of tax preferences, which consist in exempting part of their income from taxation. People who meet the age criteria, i.e. women over 60 and men over 65, can take advantage of this exemption up to the limit of PLN 85 per year.
The condition for being eligible for tax exemption is not receiving a pension or annuity under specific acts, despite having acquired the right to receive them. This includes, among others, pensions or family annuities due under various acts, as well as other benefits due to officers of uniformed services or retirement or family benefits specified in the act on the structure of common courts.
In connection with the above, entrepreneurs who have reached retirement age benefit from tax exemption, provided that they do not receive retirement benefits. The exemption applies to income generated from business activities that are taxed:
- on general terms, i.e. in accordance with the progressive scale (12% and 32%) and settled on the PIT-36 form,
- flat tax (19%) and settled on the PIT-36L form,
- a flat-rate tax on recorded revenues (ranging from 2% to 17%) and settled on the PIT-28 form.
The relief may be applied to income earned after reaching the age of 60 or 65, depending on gender, with income earned in the year of reaching retirement age being subject to relief only to the extent that it was earned after reaching that age and does not exceed the limit of PLN 85. It is not possible to extend the relief to income earned before reaching retirement age. The excess of income above the specified limit is subject to taxation in accordance with the selected method (general principles, flat tax or lump sum). In the case of income taxed under general principles, the remaining part of the income that is subject to taxation may still benefit from the "tax-free amount" up to PLN 528.
Relief for families 4+
Entrepreneurs who are parents of at least four children and meet certain conditions in accordance with the Personal Income Tax Act (Article 21, Section 1, Item 153) are entitled to exemption from taxation of income from business activity up to the limit of PLN 85 per year. It is important that this limit is available separately to each parent. This means that the joint income of both parents in the tax year may be exempt from taxation up to the amount of PLN 528 per year, provided that each parent generates income of PLN 171. The unused part of the relief by one of the parents, due to lower income, is not transferred to the other parent.
The use of this tax relief approach is available to every entrepreneur who, in a given tax year in the context of at least four children:
- He exercised parental authority.
- He acted as legal guardian if the child lived with him.
- He performed the function of a foster family based on a court decision or an agreement concluded with the starosta.
And in the case of adult children studying:
- He fulfilled his maintenance obligation.
- He acted as a foster family.
Additionally, in the context of adult children, additional restrictions have been introduced regarding the use of the relief. In a situation where children:
- They did not apply the provisions on the 19% flat tax or the provisions of the Act on lump sum tax (except for private rental settled on a lump sum basis) in relation to the revenues achieved in the tax year, the costs of obtaining revenues incurred, liabilities or rights to increase or reduce the tax base, or revenues, liabilities or rights to make other additions or deductions.
- They were not subject to tonnage tax in accordance with the provisions of the Tonnage Tax Act or the so-called ship tax in accordance with the provisions of the Act on the Activation of the Shipbuilding Industry and Complementary Industries.
- They did not receive income taxed according to the tax scale or the 19% tax on the sale of securities, shares (stocks) or derivative financial instruments, or income exempt from tax under the so-called relief for young people or relief for returning to the country, with a total amount exceeding twelve times the social pension applicable at the end of the tax year (PLN 21 in 371,52).
The tax preference mentioned above is available to parents regardless of their marital status. It is therefore available not only to spouses, but also to single parents or people raising children in informal relationships.
The relief covers income from business activities subject to taxation:
- on general terms, i.e. according to the progressive scale (12% and 32%), which are settled in the PIT-36 form,
- flat tax (19%), which is settled on the PIT-36L form,
- a flat-rate tax on recorded revenues (from 2% to 17%), which are settled on the PIT-28 form.
The excess of income exceeding the established limit will be taxed in accordance with the selected method (general rules, flat tax or lump sum). In the case of income taxed under general rules, the remaining part of the taxable income can still benefit from the "tax-free amount" up to PLN 30.
It is worth noting that taking advantage of the tax relief for families of 4+ does not exclude the possibility of also taking advantage of the family tax relief.