Return Tax Relief can be used by individuals who have decided to change their place of residence for tax purposes (i.e. their full tax residency) from abroad to Poland. This tax relief is aimed both at Polish citizens who have temporarily worked abroad and some foreign nationals moving to Poland and taking up work there. 

Under the internal Polish regulations governing the scheme, the tax exemption applies to taxpayers who have moved their place of residence to Poland and before that change had tax residency status in certain specified countries for at least three consecutive years. It applies to income earned from individual business activity taxed according to the tax scale (or subject to flat tax or to the 5% lump sum tax applicable to the so-called ‘IP Box’), employment contracts, contracts of mandate, and maternity benefits.  

However, it does not apply to the following types of income (among others): 

• income from a management contract or received by members of the management or supervisory board;  
• interest, dividends or capital gains;  
• social security payments (except for maternity allowance);  
• task contracts;  
• copyright royalties (except those obtained under an employment contract);  
• income that is subject to flat-rate income tax or exempt from income tax (e.g. per diems and other allowances for business travel); and 
• income on which tax collection has been waived by specific regulations.  

Return Tax Relief applies to income not exceeding PLN 85,528 per year and may be used in four consecutive tax years, counting from the beginning of the year in which the taxpayer transferred their residence to Poland, or from the beginning of the following year (with some specific reservations). 

Return Tax Relief is granted provided several conditions are met, including:

• The person must not have been a tax resident in Poland in the three calendar years immediately preceding the year in which the change of residence took place.
• The person must have had tax residency status for these three years in a member state of the EU/EEA or in one of the following countries:
  • Swiss Confederation;
  • Australia;
  • Chile;
  • Israel;
  • Japan;
  • Canada;
  • Mexico;
  • New Zealand;
  • South Korea;
  • United Kingdom; or
  • United States of America
• The person must have a certificate of residence or other proof documenting their tax residence in one of the above countries during the period necessary to establish the right to the exemption.
• The person has not previously benefited, in whole or in part, from the Return Tax Relief scheme.

The certificate of tax residence or other proof documenting the individual’s tax residency in a qualifying country may need to be presented to the tax office, but only upon its request. The certificate of residency is a formal document issued by the tax authorities of the country based on the double tax treaty between this country and Poland. Other proof may include, for example, an employment contract, a rental agreement, or proof of accommodation abroad.

Return Tax Relief can be applied during and/or after the end of the tax year.   

If applied during the tax year, it is applied by the tax remitter when calculating monthly tax withholding. In this case, the individual must provide the tax remitter with an appropriate statement requesting this and confirming the fulfilment of the conditions for relief under the threat of criminal liability. The tax remitter must apply the relief beginning in the month following the month in which the statement was submitted. If the individual ceases to meet the eligibility conditions for the relief, he or she must inform the tax remitter, who must stop applying the relief no later than the following month. 

If applied at the end of the tax year, it is applied in the individual’s annual tax return. 

The following is an example of how the Return Tax Relief would work to the benefit of a hypothetical individual (all figures in EUR, omitting social security and health contributions): 

This works out to a benefit of EUR 13,525 as compared to the ordinary tax regime. The individual may take advantage of this benefit for four consecutive years. Thus, the cumulative Return Tax Relief benefit may be as high as EUR 54,100.