Poland might have the best taxes in Europe

Deep dive on taxes in Poland

Hi friends

As you know probably already know, I like Poland.

And I think every dev in Europe would like it as well:

• Largest amount of jobs on eurotoptechjobs.com in Europe (together w/ the UK)

• Contained cost of living

• Great quality of life

• Growth trajectory

And…

Poland has Excellent Taxes 💸

Which will be the topic of today’s article.

Note: none of this is tax advice. I’m not a tax professional, and this is just the result of some research that I did on my own, mostly asking around and asking ChatGPT. Do your own research, and consult with a professional before you take any decision!

Let’s start.

Taxes for freelancers

Most countries have progressive taxation on income: the more you make, the higher the tax rate.

But in Poland, if you're working as a freelancer, you get:

• Flat income tax: either 8.5% or 12% depending on the nature of your work

• Contained social security contribution: 400-700 euros per month (<10% of your income)

That's a total tax range of about 10-20%, all included.

In other countries, you'll reach 30-40% tax for high incomes.

Poland is also very well-run:

• Safe

• Developed

• Good travel hub

• Good infrastructure (especially in larger cities)

• Thriving economy with plenty of opportunities both in terms of leisure and career

• Positive outlook for the future, especially compared to other countries in the world

• High-paying opportunities in tech

So I think you get a lot in exchange for your tax money.

This is a unique and rare offering.

Taxes for entrepreneurs and business owners

Poland taxation system isn't just good for freelancers.

Entrepreneurs have it good too:

• 9% corporate tax for profits below 2M euros/year

• 19% dividend tax

If you want to pay tax and cash out all the profits to your personal bank account, you'll end up with similar rates to freelancers.

That's quite good!

Here's the math, for someone making $100k/year at a 80% profit margin:

• Corporate tax: 9% of 80k is ~7.2k

• Dividend tax: 19% of 72.8k is ~13.8k

Meaning you'd pay about 21k euros, i.e. 21% of total tax.

And that's gonna stay flat as your profit increase, everything else being equal.

These are good rates. Especially considering this a top-tier, non-corrupt, high-quality of life and affordable EU country.

If you're the sole owner, you'll probably pay yourself a salary, and your taxes will become even less.

In particular:

• 9% income tax for salary below 30k euros

• 9% social security (“Remuneration by board resolution”)

Total income tax: ~5.4k euros

Then, you can deduct the gross salary from the taxable corporate income.

Basically, following the examples above, with a 30k euro salary:

• You subtract 30k from the 80k

Then, same as above:

• Corporate tax: 9% of 50k is ~4.5k

• Dividend tax: 19% of 45.5k is ~8.6k

So, the total tax becomes 5.4k + 4.5k + 8.6k = 18.5k euros

i.e. 18.5%

If you pay yourself a higher salary and fewer dividend, it's not going to change much. Maybe you’ll reach 20-22% total.

Here’s how it compares with other tax-efficient European countries:

(for the same scenario just described: i.e. limited liability company paying minimum salary + dividends to the solofounder, on a 80% profit margin business)

• Romania (until 250k euros revenue): ~11 %

• Andorra: ~11%

• Bulgaria: ~14 %

• Cyprus: ~15 %

• Albania: ~15%

• Croatia (until 1M euros revenue): ~20 %

• Latvia: ~22 %

• Estonia: ~23%

• Czechia: ~25%

• Hungary: ~25%

• Poland (until 2M euros revenue): ~19%

As you can see, Poland is quite competitive.

Romania has a much lower threshold (500k vs 2M), and - together with Bulgaria and to some extent also Cyprus - while being a great option, is a bit less reputable and falls short to Poland on standard of living.

Croatia seems quite good:

• Good standard of living - especially for families (I guess)

• Good cost of living

• Nice scenery and nature

But it doesn't have big cities like Warsaw or Krakow, maybe it's less international and expat-friendly, and has virtually no tech industry (compared to Poland) - so it's only good if you're a remote worker and/or founder.

Latvia and Estonia have higher taxes, smaller cities, colder weather, and again, much smaller tech industry than Poland. Also higher geo-political risks with Russia (unfortunately). But at least Estonia has attractive and digital-friendly public services!

EVERY OTHER COUNTRY IN EUROPE HAS IT WORSE.

And, often, not just when it comes to taxes - but also for tech opportunities, cost of living, safety, overall shape of the economy and more.

Taxes for full-time employees

Are employees in Poland hit the hardest with their taxes?

Let's see👇

Many tech workers in Poland are freelancers, and they pay about 15-20% total tax.

But if you work in big tech, you're usually a full-time employee.

Income tax in that case is worse: for high-incomes, it grows to 30-35%+

But these companies also pay a good amount of their compensation in stock options...

And these ones in Poland are taxed at a flat 19% rate!

This means that you're effective tax rate will be around 25% in total.

A bit higher than freelancers and business owners, but you also get to enjoy more security and stability.

Even for big tech full-time workers, Poland still offers a competitive level of taxation.

Moreover, it also offers the most thriving employment market of all Europe: largest amount of roles on EuroTopTechJobs.com with the UK.

Is Poland a good middle ground between "European socialism" and "American capitalism"?

As we discussed, Polish freelancers and business owners enjoy very reasonable levels of taxation in Poland: between 10% and 25% total tax.

We also saw how employees working for top companies, where part of their compensation is in stock options, also get taxed at attractive rates (~25%).

This poses a strong incentive for people creating economic value to be based in the country or move there.

Moreover, while these rates are low enough to be competitive in Europe, they're also high enough for the country to retain some of value created there.

This can subsidise high quality public services and create a safe, "European" society - without the huge wealth gaps you see in places like Dubai or the US.

Poland tries to be a safe, affordable and liveable place for all its people, but it's also smart enough to know that you need to attract value creators and businesses, if you want to have a future.

Moreover, its focus on technology, education, innovation and industrial production creates well-paid jobs for many people, which helps keep up with the rising costs (which are inevitable if the economy is growing).

Now, its public services - such as hospitals or public administration - aren’t yet at the levels of, lets say, Scandinavia or Switzerland.

But aren't far off from places like Germany or France.

Given the country’s growth trajectory, and its commitment to stay attractive for businesses and professionals, I expect this gap to keep closening in coming years.

I think Poland is set to become a great society in Europe, with a model that works.

Beyond taxes

About 60/70% of the devs I meet in Warsaw make more than $100k per year.

Meanwhile, I keep seeing (here or here or here etc) Swiss dev job ads paying 100-130k CHF for senior roles - for many of which, you also need to speak German 😄

And most of the Poland-based devs mentioned above have b2b contracts, where they pay under 20% in total taxes (including social security).

There's simply way more opportunities to work in tech in Poland than in Switzerland.

Like, this is actually an IT/tech nation.

I wonder when this knowledge will go mainstream and devs everywhere will know about it.

Companies already do, otherwise I wouldn't know how to explain why they all open up offices in Poland.

To be clear:

• I'm not saying that 60% of devs in Poland make $100k+. That's just the ones I meet. But it's many more than one would think.

• If you're making $50k in Western or Southern Europe, doesn't mean you'll make $100k in Poland. The bar here is high: "slavic devs" are very good, and obviously there's many of them here (not just Polish ones, but also Ukrainians, Belarusians, etc).

• I'm not saying Switzerland is bad. Switzerland, in many many ways, is great (I wrote extensively about it). I'm just pointing out how many high-paying opportunities are there in tech in Poland.

---

---

This article is brought to you by:

Euro Top Tech Jobs - The #1 resource for landing Top-Paying Tech roles in Europe:

• 4000+ top paying tech jobs in Europe from big tech companies, HFT firms and high-paying scale-ups.

• Hundreds of jobs from 100+ fully-remote companies paying $100-600k per year.

• Private guides - like this one - to help you land these jobs.

Six Figure Euro Engineer - Maximise your chances to boost your Tech Career in Europe, reducing time to success:

• Work 1:1 with me (Nicola Amadio, author of this newsletter), and join the other engineers who were able to 10x their tech career in the past few months!

---