Information brochure on tax changes for the year 2023

INFORMATION BROCHURE ON TAX CHANGES FOR THE YEAR 2023

Changes in VAT

From January, the 23% VAT rate will be reintroduced for fuels. The Minister of Finance, Magdalena Rzeczkowska, signed a regulation on December 1, extending the maintenance of the "zero" VAT rate on food. The regulation also provides for a reduction in the VAT rate on certain fertilizer products. The zero VAT rate on food will continue to apply from January 1, 2023, until mid-year.

Private lease settlement

A key change in taxes in the new year will be the rules for settling income from private leases. From January, these incomes can only be settled in the form of a lump sum. Individuals who previously declared rent based on general principles and deducted costs such as renovations will lose these privileges. From January 2023, taxpayers earning income from private leases will be obliged to pay a lump sum.

Increase in local taxes and fees

Everyone who owns a property, a dog, or travels to resorts will pay more. This is because the Ministry of Finance raised the maximum rates of local taxes and fees. In 2023, these will increase by 11.8%. It is worth checking on your municipality's website how much local fees will rise for the next year.

ZUS contributions

In the new year, ZUS contributions for entrepreneurs may reach up to 2500 PLN. This is due to the annual increase in the minimum wage. Currently, pension, disability, sickness, accident, and Labor Fund contributions amount to 1211.29 PLN per month. In the new year, a sole proprietor will pay 1418.48 PLN per month, plus health insurance contributions according to the chosen tax form.

Increase in excise duties on alcohol and cigarettes

In the new year, excise duties on cigarettes and alcohol will increase by 10%.

• For a 0.5l bottle of vodka, the average price will increase from 23.50 PLN to 24.40 PLN, an increase of 90 gr.
• The price of a pack of 20 cigarettes will increase by 42 gr.
• The price of smoking tobacco per 100g will increase by approximately 4.15 PLN.

Income of minor children

From January 2023, income earned by minor children (biological or adopted) from pensions will not be added to the parent's income for taxation purposes. It will be subject to separate taxation under the child's income, which may result in the obligation for the child to file a PIT (Personal Income Tax) return in many cases in 2024.

Depreciation of buildings and residential premises

From January 1, 2023, residential premises and buildings acquired or produced before January 1, 2022, and put into use before that date will not be subject to tax depreciation. The amended provisions of the Personal Income Tax Act exclude depreciation for:

• Residential buildings with elevators,
• Residential premises constituting a separate property,
• Cooperative ownership right to residential premises and the right to a single-family house in a housing cooperative, used for a business activity or leased based on a contract.

This means that owners and co-owners of such properties will not be able to include depreciation in the costs of obtaining income.

New rules for calculating tax-free amount / Changes in PIT-2

The new form will include 8 different sections, including:

• A taxpayer's statement authorizing the payer to apply the tax-reducing amount,
• A statement about a joint settlement with spouse/child,
• A statement regarding the use of increased tax-deductible costs to obtain income,
• A statement regarding tax exemptions (e.g., 4+ relief/relief for seniors),
• An application to waive the youth relief,
• An application to waive employee costs to obtain income,
• An application to waive the 50% costs to obtain income, and
• An application for not withholding PIT advances.

Limitation of the "Pałacyk+" relief

Expenses incurred from January 1, 2023, for the paid acquisition of a registered immovable monument or participation in such a monument, will not reduce the taxable income. The relief for monuments will only be limited to "renovations."

National e-Invoice System (KSeF)

Please note that from 2024, the National e-Invoice System (KSeF) will become mandatory for:

• Entrepreneurs registered as active VAT taxpayers, • Entrepreneurs exempt from VAT, • Taxpayers identified in Poland under the special EU procedure OSS, having a Polish tax identification number NIP. In other words, for EVERYONE.

Sources:

1. https://www.pit.pl/aktualnosci/wazne-zmiany-w-podatkach-od-stycznia-2023r-wzrost-danin-i-wiecej-obowiazkow-1007712
2. https://www.podatki.gov.pl/ksef/informacje-o-ksef/

Author: Martyna Jaśkowska, Kurdynowski Accounting Office in Gdańsk