Poland's Sejm passes the PIT and CIT tax changes again, 236 to 207

If you thought Poland's tax changes were settled, here is a twist: the Sejm (Poland's lower house of parliament) has just voted on them all over again. And the result was the same.

On Thursday evening, MPs passed a bill that brings a new PIT rate and bracket (PIT is personal income tax) and raises CIT, the corporate income tax, for the largest companies. In total, 236 MPs voted in favour and 207 were against.

What happened?

This was the second time the Sejm passed the law. The government resubmitted it, and the chamber moved through it at express speed.

Besides the new PIT rate and threshold, the package changes the tax brackets. It also limits the ryczałt (a flat-rate tax scheme popular with the self-employed) and raises the danina solidarnościowa (a solidarity levy on high earners).

MPs also rejected every amendment put forward. Some of them would have raised the tax thresholds. Others would have introduced indexation of the brackets, so they would rise over time. One would have struck out the CIT increase for the biggest firms.

Why a second vote?

The earlier version of the law is going in the bin. According to reports, the government fears it could be unconstitutional. So instead of patching it up, the authorities submitted a new version of the amendment.

The content is largely the same. When the Sejm first passed the reform, the headline figure was a 24% tax rate on income above 130,000 zloty.

What does it mean for you?

The key point for taxpayers is the new rate and threshold in PIT. If you earn a lot, the new bracket is the part to watch. If you run a small business on a flat-rate scheme, the limits on ryczałt may matter to you.

For big companies, the message is a higher CIT bill.

The opposition's attempts to raise the thresholds or index them were voted down. That means the bill stays in the form the government wanted.