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[simon_porter00]

Unofficial guide to tax for umowa o dzielo (tax year 2007 Jan - Dec)

EDIT, original post edited to bring this up to date and add some more information.

'Umowa o dzielo' for people who don't have a certificate of residence*
*Once i get a clear definition of what this is, i'll put it up here
This is most teachers.

Simply, you get taxed at 20% for all your earnings. This means you get less per month compare to the other system below, BUT, it's 20% on all your earnings no matter how much you earn. This has obvious advantages if you're earning mega bucks because then you won't be taxed at the higher tax rates.

Of course, no provision is made for health payments, retirement etc etc.

'Umowa o dzielo' for people who have a certificate of residence.

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:
o up to 43, 404 k p/a you pay 19%
o 43, 405k p/a � 85,257k p/a you pay 30%
o 85,528 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 as long as it adds up to more then the 20%, but i've no idea how to do this. Get an accountant on the case if you need help. Please don't ask me!!

Notes:
At the end of the tax year, when you submit the declaration of income (everybody does this individually and has to be done by the end of March) you are entitled to decrease the amount of tax due by 572zl 54gr. The tax law says this apparently, because Poland doesn't have a tax free income layer.
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.

Any comments/corrections welcomed......

[Khrystene]

Sorry, but this info is incorrect.

On the contract UMOWA O DZIELO you get 10% tax taken out... not 20 or 19... that's the rate for Umowa o Pracy or Zlecenie.

[Khrystene]

Also, if you don't have a 'Certificate of Residence' - Karta Pobytu, you shouldn't be working here and the company will be hiring you illegally, which means you're getting paid 'under the table' which also means they're not paying Tax. So.... you won't be entitled to any tax returns etc...

[simon_porter00]

Hi Khrystene,
Having checked within the act of law that covers taxation the "Physical Person Income Tax Law" the following can be said.

There is no 10% tax law in Poland. Therefore, you cannot be taxed at 10%. If you hold an umowa o dzielo you are taxed at either 20% or 19%.

The Karta Pobytu is not the Certificate of Residence (translated directly Karta Pobytu means Card of residence). They are two different things. The certificate of residence is a mark/grade/qualification you have to 'pass' purely for the purposes of taxes. Obviously, if you have the Karta Pobytu you'll get the Certificate of residence. The 'certificate of residence' made its first appearance in Polish law this year.
To say that you'll be working illegally until you get the Karta Pobytu is way off the mark i'm afraid.

You can get registered to the place you live when you get to Poland. Once you're registered you can then apply for a NIP number. You can even qualify under the tax rules for the certificate of residence without the Karta Pobytu (In fact I have done all the above without a Karta Pobytu following all advice i've been given by the school, the Polish beaurocracy and a Tax advisor).

If you're working for a legit school, they'll give you a pay sheet which shows the tax deductions. You should also get a POLTAX form in Feb/Mar to show all the tax details (as i have received and those that have worked alongside me have received). Now, of course, some schools aren't legit and won't do the above.

In fact the only way you can get the Karta Pobytu is by living in Poland for 5 years or marrying a Polish person. So if you're saying the majority of English language native speakers/other language native speakers are working here illegally because they haven't been here for 5 years or have got married, is incorrect.

[Khrystene]

Sorry, but every UMOWA O DZIELO I've EVER seen, and I've seen a few, have been on 10% tax, which is why they always try to convince you it's actually worth your while.

As for Cert of Residence, I didn't know it existed. So excuse me on that point.

[anospi]

Interesting.

I completed a 9 month contract in Poland last year, and I was on a monthly salary of 2,350zl. Amount of tax I paid each month: 0zl.

The school (out of interest, an IH school) registered me with the authorities, and I have a little certificate so I assume that's the Cert of Residence.

Funny thing is this. The Americans at my school DID pay tax, but the EU citizens (I'm talking about teachers I worked with, all working in Poland for the first time like me) DIDN'T. Someone told me somewhere along the line that 'foreigners' don't have to pay tax for their first two years in Poland. Sounds a bit dodgy to me.

[dynow]

[zippy2k]

Hmmmm. I'm looking at a "Rachunek do umowy o dzieło" right now and they have taxed me at 9.5% of gross earnings, or 11.5% of the 80% you mention above, less expenses. I didn't realise the tax was lower. I have a NIP and this is also on the rachunek.

Earlier I was told that all foreigners are taxed at 20%, and in fact was taxed at this rate at another school, whilst working under an umowa dzieła.

As far as I understand it, you have the right as an EU citizen to work up to 9 months in Poland and pay no tax but only if you can show that you are already paying tax in your home jurisdiction(I don't know about other countries but Poland and the UK have a "no double taxation" arrangement). If not, you should be, as I was, given by your employer/apply for a "karta pobyta"/residence card for a year, which should also identify you on the Polish tax system and you pay 20% tax on all earnings...

[zippy2k]

I beg your pardon, guys, correction. I approached the Urzad Mazowiecki over the residence card thing - For *residence card, read "certificate of registration of stay for EU citizens". I got a little card in 2004 when I arrived here but the law has since changed. Since the 14th July 2006 a new law has come into effect in Poland, stating that there are two entitlements to EU citizens in terms of residence on Polish territory. The first is the certificate of residence(rejestracja pobytu obywatela Unii Europejskiej, a.k.a. "temporary/specified period residence permit"), the second the right to permanent residence(prawo stałego pobytu), or, I believe a.k.a. "permanent residence permit" to which you are eligible after 5 years of uninterrupted residence on Polish territory.

You have to apply for both, and the vovoideship Urzad in which you have your registered address is who you see, in my case mazowiecki.pl .

I was told this year by the Urzad Mazowiecki a residence card costs 50PLN plus stamps and a residence permit 300PLN plus stamps.

[dynow]

well, i'm american. i don't know what the Karta Pubytu regulations are for EU citizens.

and yes, it costs 350 PLN for a Karta Pubytu.

also, regarding "permanent" residency, i have no idea how long i have to be here till i can apply for one.

[zippy2k]

Sorry dynow, I don't know what the reguations are for Americans though I imagine somewhat more restrictive, if my work experience in America as an EU citizen is anything to go by, i.e. shorter periods of residency...No doubt someone else can fil us in on that one...have you contacted your Vovoideship on this?

[dynow]

hmmm.....i'm not following zippy. what does you working in America have to do with an American working in Poland?

here's what is going on right now in poland......Americans are a high commodity in Poland right now. the rules have already began to relax regarding work permits, entering the country, etc. American and Brittish big shots are routinely recruited to Poland to work at some high position in a company here to show a dept. or an entire company the ropes, get them off the ground, etc. Not to mention, there are many American companies putting up offices here.

As of now, i can stay in Poland as long as i like as a temporary resident(only drawback is a big spike in medical insurance after 2 years) and I am confident that within a few years, it will be even easier for Americans to make their way over to Poland to live.

Either that, or maybe I'll end up marrying my Polish girlfriend. That outta take care of it!

[Master Shake]

Work permit aside, how hard is it for a Polish person to come to America (U.S.) for a 1-3 week period of time, (i.e. on vacation)?

I know this is a little off-topic, but a Polish English teacher told me that even a vacation in the U.S. required a lot of paper work, waiting and hassle for Poles. Is this true?

[dynow]

shake, it absolutely is true.

you make an appointment, trek out to Warsaw, speak to somebody after giving a ton of paperwork and personal info., and they basically look at you and decide how long they feel like letting you go. it's real sketchy, and it's more of a lottery/luck than anything else. oh, and for a VISA, it costs a few hundred DOLLARS just to apply, whether you get it or not. it's no fun for the Poles.

this is one of the reasons why there were/are Poles pissed off that Bush was here, was prepositioning Poland with the missle defense system. he wants to come here and build some elaborate missle silo, yet, he won't let any Poles enter his country. to boot, Germans can go in and out of America no questions asked. they just need a valid passport and they're in.

my girlfriend was telling me what she went through to get a 10 year VISA to America and i just couldn't believe the system they use here.

[Khrystene]

I hear that from around Jan this year EU citizens don't need to get the same things they used to to work here in PL. (I have citizenship via family so my situation is entirely different.)

On the matter of Taxes that Dynow didn't pay - apparently, a little known fact is that your first year working here you don't have to pay tax.

As for Umowa o Dzielo, it's still a crap contract unless you only want to stay a year. And they CANNOT force you to open your own business before they hire you. One good thing PiS (Zyta Gilowska) did this year was to make that illegal.

As for Visa's to the USA, not that I'm interested, but my Polish cousin got a 10 year one very easily. She's an artist and had work commitments here, so I think that certainly made a difference.

Someone mentioned the differences between what you get based on who serves you, which Urzad, what day of the week/month, which party is in power... and so on. This is what Poles have had as a system for years. Welcome to Post-Communism!!