A new law aimed at reducing emigration of young Poles might also encourage young foreigners to stay in the country longer, especially graduates of Polish universities. Since 1 August 2019, new regulations have exempted people under 26 years who have either an employee contract (umowa o prac) or a contractor agreement (umowa zlecenie) from paying a large portion of income tax.

Young people can now earn up to PLN 85,528 (about EUR 19,890) per year without paying income tax. This exemption also applies to foreigners who are tax residents or have an employment contract in Poland. Thus, foreigners working as contractors cannot benefit from the exemption.

A tax resident is a person who stays in Poland for more than 183 days in a tax year or has a ‘centre of vital interests’ in Poland. Taxation of foreigners is regulated by bilateral agreements, which stipulate that only foreigners who have a certificate of tax residence in Poland are entitled to a lower tax rate or tax exemption.  

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