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[simon_porter00]

Official guide to tax for umowa o dzielo.

Right, following consultation with various legal and accountant types what follows is what I believe is the, THE, definitive answer to tax based for teachers on an �umowa o dzielo� contract.

For the sake of argument lets say the teacher earns 4000zl p/m in this scenario.

We all know that the rate of tax at this level should be 19%. No provision is made for social security, national health or future pension as you don�t make contributions to this under this type of contract.

(Income tax bands:
The first 2790 earned should be tax free
o up to 37, 024 k p/a you pay 19%
o 37, 025k p/a � 74,048k p/a you pay 30%
o 74,049 k p/a + you pay 40%.)

Therefore it would be safe to assume that the teacher should receive 4000zl � 19% every month = 3240zl p/m either paid into a bank account or cash in hand. This however is incorrect.

According to Polish tax law the profit you make, not the income, is taxed. The profit is the income less the expenses you�ve had to bear to achieve income. What does this mean?
The Polish tax law assumes people earning on this type of contract will use 20% of their salary on expenses. Therefore 20% of your monthly income is not eligible to be taxed.
The sum therefore becomes:

4000 � 20% = 3200. This is the actual amount that you should be paying tax on.
19% of 3200 = 608. Therefore this is the total amount of tax you should pay on your total earnings.
4000 � 608 = 3392. The actual amount of money you should receive each month.

So that�s the good news. The maths above should be done by your schools accountant/financial type person. If this is not done by your school explain to them that�s how it should be done and if they still refuse then you can claim a tax rebate at the end of the financial year (which runs Jan to Dec in Poland).

The even better news! If you actually do have some expenses related to your teaching � you buy your own pens, buy own paper, buy speakers for your computer (because you�ve ripped the textbook cd�s onto your laptop ), have to pay for a DELTA etc when you buy the product ask for a �factura� � a special document to show proof of purchase (This however does suppose you are registered where you live). This will then able you to claim tax back at the end of the year because these are expenses and expenses can�t be taxed.

Notes:
How do you claim tax back at the end of the year? No idea, sorry.
Why do you have to registered before you can get a tax rebate with a factura. Well the tax office needs to have proof you live somewhere (you�ll have to write the address on the factura). If the factura is issued before the date of registration and the tax office checks then they politely tell you to naff off.
How is the tax free income worked out? No idea. I�m assuming (quite probably incorrectly) its taken off either your first pay packet of the year or spread out over all your pay packets.

Any comments/corrections welcomed......

[redsoxfan]

We were told that we can only deduct something like 10% of the VAT that we pay, because we're a school. (Limited Liability Company--Sp. Komandotowa in Polish). The reasoning behind this is odd and I can't really explain it fully. I don't know if the same applies to private individuals who work o dzielo. I have heard that folks working o dzielo only pay taxes on 80% of their earnings, like you said.

[simon_porter00]

Hmm, I'll run this past my 'legal advisor' i.e. the mrs to see what she has to say.

[cezarek]

Sp�łka Komandytowa is a bit unusual. It's usually law firms who register like that. A Sp�lka z o.o. is a bit more useful, and you can deduct all the vat (assuming you charge it - lessons are vat free).

[Grrrmachine]

I've worked for more than one school here, all on Umowa o dzielo, and all deducting 10% from 80% of my monthly wage. My stickler of a mother-in-law (who's an accountant) pored over my PIT form last February to make sure everything was above board, and I even got a hearty rebate from the Urzad Skarbowy a few months later.

[Alex Shulgin]

[dfm]

Hi Guys - a very interesting thread - Could you tell me what the tax situation is if you work through an American registered company and have been in Poland for at least 3 years?

[redsoxfan]

cezarek wrote: