Poland unveils tax reform raising PIT thresholds and corporate levy to 22%

Restructuring personal income brackets

Prime Minister Donald Tusk and Finance Minister Andrzej Domański announced a package of tax adjustments intended to take effect in 2027. Under the proposal, the threshold for the second personal income tax bracket increases from 120,000 PLN to 130,000 PLN, maintaining the baseline 12% rate up to that level. The government also introduced an intermediate tax bracket of 24% for annual earnings between 130,000 PLN and 150,000 PLN. Income exceeding 150,000 PLN will remain subject to the top 32% tax rate, which previously applied to all income over 120,000 PLN.

When we exceed 130,000 zlotys, we do not fall into this highest 32 percent rate, but we will have 24 percent.

According to Domański, approximately 3.5 million taxpayers will benefit from the adjusted brackets, yielding annual savings of up to 3,600 PLN per person. Łukasz Kozłowski, chief economist at the Federation of Polish Entrepreneurs, calculated that standard employment contract workers earning above 11,880 PLN gross per month will experience tax relief. Kozłowski noted that maximum savings of 3,600 PLN annually apply to individuals earning over approximately 14,780 PLN gross monthly. Monthly gains will range from 21 PLN for workers earning 12,000 PLN gross to 178 PLN for those earning 13,000 PLN gross.

Offsetting levies on corporations and high earners

The government paired personal income relief with tax increases on large enterprises and high earners to keep the reform fiscally neutral. Corporate income tax for companies with annual revenues above 50 million euros (roughly 200 million PLN) and tax capital groups will rise from 19% to 22%. Domański pointed out that a 22% rate aligns with the European Union average, noting that Slovakia recently increased its corporate tax rate to 24%.

This is a change from which 3.5 million taxpayers will benefit next year. The annual gain, the benefit from this reform, can reach up to 3,600 zlotys.

In addition, the solidarity levy on individual incomes exceeding 1 million PLN annually will increase by one percentage point, moving from 4% to 5%. The revenue threshold for lump-sum taxation on registered revenue will fall from 2 million euros to its pre-2021 level of 250,000 euros (approximately 1 million PLN). Tusk stated that maintaining fiscal balance is mandatory given that Poland's general government deficit stands near 7% of GDP. State budget figures through July show a deficit of 141 billion PLN, with value-added tax bringing in 192 billion PLN and debt servicing costs reaching 46.6 billion PLN.

Political criticism and market response

Opposition Law and Justice (PiS) representatives criticized the plan as cosmetic and excessively complex. PiS lawmaker Przemysław Czarnek argued that maintaining a 12% rate up to 180,000 PLN would save an earner at that income level 12,000 PLN annually, compared to 3,600 PLN under the cabinet proposal. Former defense minister Mariusz Błaszczak urged the government to avoid multiplying tax thresholds. Presidential Chief of Staff Paweł Szefernaker also rejected the measures, pointing to an August 2025 presidential bill proposing a 140,000 PLN threshold and zero PIT for parents with two or more children. Tusk acknowledged uncertainty regarding whether President Karol Nawrocki would veto the legislation.

If you really want to leave Poles with more money, support our proposal. Not PR and cosmetics, but genuinely lower taxes.

On the Warsaw Stock Exchange, the WIG20 index gained 0.6% and the broader WIG climbed 0.3% following the announcement. Banking equities rose, led by PKO BP at 3% and Bank Pekao at 1.6%. Conversely, game developer CD Projekt dropped 2.5% and retail firm Modivo declined 1.2%.