contracts for specific work,
management contracts – the manager pays tax even if he is under 26 years old,
assistance with harvesting – revenues from such a contract are included in other sources of revenue and therefore tax must be paid,
property rights, including copyrights – does not apply to employees and contractors,
business activity and freelance professions - in this case you have to pay tax,
from sickness benefit, care allowance, sickness benefit from accident insurance and rehabilitation benefit.
Debts that are not covered by the youth tax relief do not affect the amount of income that is exempt under this relief.
How much is the philipine phone number youth tax relief?
The exemption applies to an amount not exceeding PLN 85,528 in the tax year. After exceeding the exemption limit, revenues are subject to taxation according to the general rules applicable in the tax system.
Exceeding the limit and the tax-free amount
The relief limit is PLN 85,528, but persons eligible for the relief can also benefit from the tax-free amount of PLN 30,000.
This means that the obligation to pay tax will only occur after exceeding the limits of the youth tax relief and the tax-free amount.
The excess over the amount benefiting from the exemption is subject to a deduction for contributions to retirement, disability and sickness insurance deducted by the payer from the taxpayer's funds.
Example
Jan is 23 years old, he is employed under an employment contract, from which his annual income is PLN 80,000.
Income from employment is covered by the relief, Jan does not exceed the income limit and therefore meets all the requirements necessary to be covered by the relief.
However, Jan runs a business.
What impact does running a business have on youth tax relief?
Business income is not covered by the relief, which means that Jan is subject to one of the three forms of taxation of business income. However, this does not affect the amount covered by the youth relief, which he is entitled to under his employment contract.
Therefore, Jan will pay income tax only from the business activity he conducts.
Several contracts, but relief for young people
The exemption limit is cumulative, which means that it covers all contracts covered by the youth tax relief; the total amount obtained from these contracts cannot exceed the specified limit of PLN 85,528.
Exceeding the limit results in taxation of the amount by which the limit was exceeded.
Example
Jan performs work on the basis of mandate contracts for two different clients.
This means that his total income from both contracts cannot exceed the limit of PLN 85,528 in the tax year.
Important: you should monitor your annual income yourself and inform your employer at the appropriate time about waiving the relief so that he or she can start calculating PIT advances.
Application for waiver of exemption
It is possible to submit an application for the collection of advances without applying the tax exemption. Such an application is submitted to the employer, who collects the advances without applying this exemption, at the latest from the month following the month in which he received the application. This application is submitted separately for each tax year.
If the taxpayer files an application for non-application of the exemption, the payer collects advances on general terms. However, the taxpayer may in such a situation use the exemption in the annual settlement.
How to settle PIT-37 for persons under 26 years of age?
Persons who have earned income covered by the youth tax relief not exceeding the limit are not obliged to submit an annual PIT tax return.
If the revenues exceed the limit, the taxpayer is obliged to take into account the exceeded amount and settle it.
People whose income comes from contracts that are not covered by the youth tax relief are required to submit a PIT declaration.
Relief for young people and deduction of income tax costs
In the case of application of the exemption, the costs of obtaining income from:
employment relationship,
employment relationship,
outwork,
cooperative employment relationship,
contracts of mandate.
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