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The new law is already in effect.  Starting in July, we'll be earning more - some at 5 percent, some less.  Check gross and net accounts [16.06.2022]

The new law is already in effect. Starting in July, we’ll be earning more – some at 5 percent, some less. Check gross and net accounts [16.06.2022]

This is certain, because the law was signed by the President of the Republic on June 14! Starting with withdrawals in July, more money will be transferred to our wallets or bank accounts as the lowest tax rate has been reduced from 17 to 12 percent. Of course, it wouldn’t be the full 5 percent, because “all the way” they would subtract 9 percent from it. health insurance premium. Although not all, for example, certain employment contracts are exempt from the health insurance contribution. So we calculated, based on a dozen or so examples, how those tax benefits for different people would be shaped on a monthly basis and by the end of the year. Checks!

Inflation has already reached 15 percent. Subsequent increases in interest rates have not yet been able to stem this dynamic increase in rates, and therefore in the cost of living. In this case, the income tax is reduced by 5%. – from 17 percent up to 12 percent – in practice, inflation is reduced to a single-digit level. Assuming inflation in April does indeed peak, it will automatically fall to 7% in practice.

Unfortunately, it will not be felt by people with a net income of up to 2500 PLN per month, since this income is exempt from income tax from the beginning of the year (a free amount of 30,000 PLN per year) and a reduction in the lower tax rate will not be possible for them in practice.

At times when high prices from week to week consume almost all reserves and savings, any form of financial cushion is highly desirable. This would certainly reduce the first rate of the income tax schedule from 17 percent to 12 percent. Regardless of the group of persons whose annual taxable income does not exceed 30,000 PLN. PLN (because this is the total amount exempt from PIT), the tax reduction means that for every 100 PLN earned, it will be an additional 4.55 PLN in wallets (total PLN 5 minus 9% of the health insurance premium).

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Complex relief for the middle class to cushion the shock of the 7.75% increase. Tax exemption (in fact, the abolition of the right to deduct almost the entire tax contribution) led to confusion, and along with misunderstanding regarding the determination of the submitted tax (PIT-2) led to the failure of the entire tax reform. It is good, then, for the government to simplify the issue of personal income tax by admitting the error.

The improvement of the Polish tax order was supposed to concern mainly businessmen and other groups of taxpayers affected by the lack of the right to tax exemption for the middle class. It ends with the abolition of this exemption and the reduction of the first tax threshold of 17 percent. up to 12 percent – for all. Since this exemption was supposed to be a shield against the effects of eliminating the right to deduct almost the entire health insurance contribution from taxes, what will be the effect of the new changes especially for those who, unlike everything else, lose middle class relief, i.e. those who get jobs full time? Who will win and who will lose?

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It is not as simple as it seems at first glance – if it was just a reduction in the tax rate, then everything would be clear. However, at the same time, the middle class benefit will be abolished – by the way, after only a few months of work – and will cease to provide protection. This means that lowering the tax rate itself will in many cases produce less tax-exempt liquidation and the balance may be negative rather than positive. Therefore, it is worth analyzing specific accounts.