PIT - the most important changes in 2016
Numerous changes have been made to the PIT Act by way of various amending regulations, including extended scope of revenues exempt from fax, and new rules for taxation of income from undisclosed sources.
New revenue items exempt from tax
Under the Act of 24 July 2015 amending the act on mortgage bonds and mortgage banks and certain other acts, revenues from the following sources will be exempt from income tax:
- Interest or discount on bonds received by individuals, and
- Interest or discount on bonds issued by Bank Gospodarstwa Krajowego and offered on foreign markets for the financing of statutory purposes of Bank Gospodarstwa Krajowego, involving the promotion of economic policy pursued by the Government, implementation of government socio-economic and local and regional development programs, and income from the sale of these bonds for a consideration.
Exemption of maternity allowance
The Act of 24 July 2015, amending the Family Benefits Act and some other acts, introduced a new tax exemption, with effect from 1 January 2016, whereby no income tax should be charged on maternity allowances received under regulations on social insurance of farmers. The amendment was aimed at promoting equal treatment in receiving child support for farmers and individuals covered by the general insurance system.
Private Use of Company Cars
Since January 1, 2015, the income of employees who privately use company cars will be increased by PLN 250 per month (for cars with engine capacity up to 1600 cm3) and by PLN 400 per month (for cars with engine capacity in excess of 1600 cm3) for income tax purposes. Where company cars are used privately for only a part of the month, the additional income will be added proportionally for each day the company car is used privately.
New rules for taxation of income from undisclosed sources
On January 1, 2016, the provisions of the Act of 16 January 2015, amending the PIT Act and the Tax Code, came into force. The new law provides rules for taxation of income from undisclosed sources, defines the concept of expenditure, specifies the point of time of the chargeable event, determines what income from undisclosed sources is taxable and provides a tax rate of 75% to be charged on such income.
50% of the value of contracts for specific work (umowa o dzieło) may be claimed as tax deductible again – but only for some professions
In 2013, a principle has been introduced to the PIT Act whereby taxpayers were able to claim as tax deductible 50% of the value of contracts under which copyrights were transferred, but only up to an annual limit of PLN 42,764. Under the regulations coming into force in 2017, this annual limit no longer applies. However, the preferential treatment will only be limited to individuals engaged in creative and artistic activity including: architecture, interior design, landscape architecture, urban design, literature, visual arts, music, photography, audiovisual creativity, choreography and violin making art, folk art and journalism, acting and stage performance, theatre and stage performance directing, dance and circus art, activity of conductors, vocal and instrumental artists, costume making and set design, audiovisual production by directors, writers, cinematographers and photography and sound operators, editors and stuntmen and journalistic activities, taking part in cultural and artistic competitions.
Increased Child Tax Credit
Mainly multi-children families defined as those having at least three children will benefit from the increased child tax credit. CTC will be increased by as much 20% which means that a family with three children may receive an additional PLN 332.
Shorter deadlines for filing tax information in paper form
The time limit for filing PIT-11, PIT-8C, PIT-R, IFT-1/IFT-1R information and annual tax calculation PIT-40 will be shortened by one month (by the end of January following the tax year) if submitted in paper form. This measure is aimed at encouraging taxpayers to file these information forms electronically in which case the previous deadlines remain unchanged.