How to avoid double taxation?

Double taxation is a situation in which a taxpayer is charged two different taxes for the same income. Such a course of action – according to Polish judicial practice – is unlawful and contrary to the Constitution. The risk of double taxation primarily concerns those taxpayers who work or run a business in different countries – for example, they live in Poland or have their centre of interest here, but earn income abroad or vice versa.
Table of contents:

Where does double taxation come from?


Methods of avoiding double taxation


Method of exclusion with progression

EXAMPLE

  1. 62,000 + 110,000 PLN = 172,000 PLN (total income).

  1. 85,528 PLN * 17% = 14,539.76 PLN
    86,472 PLN * 32% = 27,671.04 PLN
    PLN 14,539.76 + PLN 27,671.04 = PLN 42,210.8 (income tax)

  1. 42,210.8 PLN / 172,000 PLN * 100% = 24.54% (tax rate)

  1. 62,000 * 24.54% = PLN 15,214.8 (tax due)

Proportionate deduction method

EXAMPLE

Double taxation vs. abatement relief


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