In 2023, we will not pay advance PIT payments. What conditions must be met?

As of January 1, 2023, employers will not be required to collect advance income tax payments. This will become possible if the employee submits an appropriate application and his income in the tax year does not exceed the amount indicated by the Ministry of Finance. 

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Entrepreneurs (i.e., premium payers) will not be required to collect an advance PIT payment on income of up to PLN 30,000. However, if this amount is exceeded, then an advance tax will have to be collected on the excess. In such a case, the advance tax payment will not be reduced by the amount reducing the advance payment. As explained by the Ministry of Finance, this is due to the fact that a taxpayer who makes PIT advances up to PLN 30 thousand will not pay them, thus using up his tax-free amount.

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The exemption from the need to pay advance payments will apply for the entire tax year, and a request to this effect will have to be granted by the employer no later than the following month. An exception to this rule will be the case in which the payer is a pension authority (i.e., Social Security, for example). Such institutions have been obliged to grant the request no later than from the second month following the month in which the document was received by them

Who can file a request for not collecting PIT advances?

According to the assumptions of the Ministry of Finance, the possibility of filing an application for non-collection of advance income tax payments will be available to those employed, among others, under a contract of employment, a contract of mandate, a cooperative employment relationship, a contract of voluntary work, or receiving benefits from social security. Their income in the entire tax year will not be allowed to exceed the already mentioned amount of PLN 30 thousand.

Those who perform casual or seasonal work and employees who take up employment at the end of the calendar year will benefit most from the new regulations. Taxpayers filing the proposal in question will benefit from the tax-free amount in each month in which the employer collects advance income tax payments and will not have to wait until the annual settlement.

How to apply for not collecting advance income tax?

The request for not collecting PIT advances must be submitted by the employee directly to the employer. The document will have to be provided in writing, and the Ministry of Finance has also provided for the possibility of transmitting it in another way - for example, through the digital human resources and payroll system operating in the company. The payer will also be required to accept the statement submitted on the official PIT-2 form.

In doing so, the Finance Ministry made it clear that the application will remain valid only in the year in which it is submitted by the employee and will not apply in subsequent tax years. Thus, if the taxpayer wishes to use his entitlement in the following year as well, he will have to reapply.