The Polish Deal (Polski Ład) introduced a range of tax measures aimed at improving living conditions in Poland and encouraging citizens living abroad to return. One of the most important instruments is the return relief (ulga na powrót), which offers significant tax exemptions for people who decide to move their tax residence to Poland. This tax preference can bring real financial benefits, but it requires meeting specific conditions and procedures.
The return relief mechanism was designed as a long-term solution supporting re-emigration, offering a four-year period of tax exemptions. Revenue of up to PLN 85,528 a year can be exempt, which is a significant financial incentive for people considering returning to the country. The relief covers various types of revenue, from salaries under employment contracts to business income, creating a comprehensive support system for returnees.
The return relief was introduced under the Polish Deal as an instrument encouraging Poles to return from abroad. The main condition is having no place of residence in Poland for the three full calendar years preceding the year of return and in the year of return up to the day of the move. The taxpayer can choose the first year of applying the relief, which gives flexibility in tax planning
Purpose and assumptions of the return relief
The return relief was created in response to the need to stop the outflow of human capital from Poland and to encourage qualified citizens living abroad to return. The main goal of this solution is to reverse the trend of economic emigration by creating attractive tax conditions for people deciding to return to the country.
The basic criterion for using the relief is having no place of residence in Poland for at least three years – precisely: for the three calendar years immediately preceding the year of the change of residence and from the beginning of that year to the day before the move (Article 21(43)(2) of the PIT Act). After returning, the taxpayer must be subject to unlimited tax liability in Poland (point 1). This requirement is meant to ensure that the preference is actually used by people who built their professional and personal lives abroad for a long time and then made a conscious decision to return.
Flexibility in choosing the base year is an important advantage of this solution. The taxpayer can decide whether to start using the relief in the year of the change of residence or in the following year. This option allows the tax benefits to be planned optimally depending on the individual financial and professional situation.
The Polish Deal allows the taxpayer to choose the first year of the relief, called the base year. If someone changes residence in 2026, they can choose 2026 or 2027 as the base year. This decision determines in which specific years they will be able to apply the tax exemption
An example shows how the relief works in practice. If a taxpayer moves their tax residence in 2026, they can use the relief for 2026, 2027, 2028 and 2029, choosing the year of the change of residence as the base year. Alternatively, they can choose 2027, 2028, 2029 and 2030 if their base year is the year following the year of the change of residence.
The relief is universal in terms of the form of tax settlement. It does not matter whether the taxpayer files individually or jointly with a spouse – the exemption can be used in either case. This flexibility makes the relief available for different family models and life situations.
Types of revenue covered by the relief
The scope of revenue covered by the return relief is defined comprehensively, covering the main forms of professional and business activity. The exemption applies to the following categories of revenue:
- Revenue from a service relationship
- Revenue from an employment relationship
- Revenue from outwork
- Revenue from a cooperative employment relationship
- Revenue from contracts of mandate (umowa zlecenia)
- Revenue from non-agricultural business activity
Revenue from contracts of mandate (concluded with an entrepreneur or another business – Article 13(8) of the PIT Act) is also exempt, which matters for people working under civil-law contracts. Since 2022, the exemption has also covered maternity benefit (Article 21(1)(152)(d)). The return relief can be combined with deductions from income, such as the thermal modernisation relief.
Covering revenue from non-agricultural business activity is particularly important. The exemption applies to business taxed under the tax scale (12% and 32%), the flat 19% tax (podatek liniowy), the 5% IP Box rate (Article 30ca) and the flat-rate tax on recorded revenue (ryczałt). This broad definition allows entrepreneurs running various forms of business to use the relief.
The tax exemption covers revenue up to an amount not exceeding PLN 85,528 in the tax year. This limit applies to the total of all revenue covered by the relief, regardless of its type and source. Exceeding the limit means that the excess must be taxed under the standard rules
The possibility of combining different sources of revenue under one relief is a significant advantage of this solution. If the taxpayer runs a business and at the same time earns revenue from an employment contract or a contract of mandate, all of this revenue can be covered by the relief, provided that the annual limit of PLN 85,528 is not exceeded.
The four-year period of applying the relief ensures stable and predictable tax benefits. The right to the exemption applies for four consecutive years, which allows long-term financial and professional planning. The taxpayer keeps the right to decide when to start using the relief, but only in two variants: from the year of moving their residence or from the following year.
Conditions and criteria for applying the relief
The criteria for using the return relief are precisely set out in the tax rules. The condition relating to citizenship or previous place of residence has two alternative variants (Article 21(43)(3) of the PIT Act), so some foreigners can also use the relief. If you are a foreigner who wants to run your own business in Poland, see whether to choose a JDG or an sp. z o.o..
The first variant is holding Polish citizenship, the Pole's Card (Karta Polaka) or citizenship of a European Union member state, a European Economic Area country or the Swiss Confederation. These criteria define the group of people entitled to the tax preference.
Alternatively, the relief is available to people who had their place of residence continuously for at least three years (for the entire required period of having no place of residence in Poland) in specified countries. The list includes European Union member states, European Economic Area countries, the Swiss Confederation, Australia, the Republic of Chile, the State of Israel, Japan, Canada, the United Mexican States, New Zealand, the Republic of Korea, the United Kingdom of Great Britain and Northern Ireland and the United States of America.
The third variant of eligibility concerns people who lived in Poland continuously for five calendar years before the three-year break preceding the year of return. Regardless of the variant, every taxpayer must hold a certificate of residence or other evidence documenting their place of residence for tax purposes for the period needed to establish the right to the exemption (Article 21(43)(4))
An important limitation is that the relief can be used only once. Taxpayers who have already used the return relief cannot use it again, even if they move their place of residence abroad again and then return to Poland after another three years. This limitation is meant to prevent abuse and to ensure that the relief serves a genuine return to the country, not temporary changes of residence. The situation of people deported from the USA is discussed in our post on return relief after deportation from the USA.
Specific examples illustrate how the criteria work in practice. Ms Alicja, who lived in Ireland for 10 years and had her centre of life there, can use the relief when returning to Poland in 2026. If she plans to start using the relief from 2027, she will be able to apply the exemption until 2030, for four consecutive years.
Mr Mirosław, who is returning to Poland after two years in Spain, will not be able to use the return relief. Although he is moving his residence to Poland, he does not meet the basic condition of having no place of residence in Poland for at least three years. This example shows that shorter periods abroad do not entitle a person to the tax preference.
Application procedure and documentation
Applying for the return relief requires preparing the right documents and following the procedures set out in the tax rules. Here are the steps needed to use the relief:
- Preparing documentation – gathering all documents confirming that the conditions for the relief are met
- Verifying the period of residence – documenting the three-year period of having no place of residence in Poland
- Choosing the base year – deciding when to start using the relief
- Filing the return – indicating in the tax settlement that the return relief is being used. For business owners, our accounting firm can prepare the return claiming this relief.
- Monitoring use – keeping track of the amount of revenue covered by the relief
The documentation must confirm the three-year period of having no place of residence in Poland before returning. Every taxpayer using the relief must have a certificate of residence or other evidence documenting their place of residence for tax purposes in that period, and in the variant of five years' residence in Poland – also for those years.
The relief can be settled in the annual tax return or applied during the year: the payer (płatnik; e.g. the employer) takes the exemption into account in tax advances if the taxpayer submits a declaration that they meet the conditions, indicating the year in which the exemption starts and ends (Article 31a(8) of the PIT Act). The choice of the base year determines the entire four-year period of using the preference. The return relief and 50% tax-deductible costs for creators share one combined annual limit.
Verifying eligibility for the relief may require additional documents confirming the stay abroad and the change of tax residence. The tax authorities may request documents confirming the actual transfer of the centre of life to Poland.
The choice of the base year is crucial for the entire period of using the relief. The taxpayer can choose the year of the change of residence or the following year as the starting point of the four-year exemption period. The exemption applies in four consecutive years, so once the period has started, it cannot be interrupted or postponed
The tax authorities can check compliance with the conditions of the relief throughout the period of using the preference and in later years. Particular attention is paid to maintaining tax residence in Poland and not exceeding the annual limit of PLN 85,528 of exempt revenue.
Limits and restrictions of the relief
The exemption under the return relief is limited to PLN 85,528 in the tax year. This limit is absolute and applies to the total of all revenue covered by the relief, regardless of its type and source. Exceeding this threshold means that the excess must be taxed under the standard tax rules.
The limit applies throughout the four-year period of using the relief. The unused part of the limit cannot be carried over from one year to the next, nor can limits from different years be combined. Each tax year is treated separately, with its own independent exemption limit.
An important restriction is that the return relief can be used only once. Taxpayers who have already used their right to this preference cannot use it again, even if they meet all the formal conditions again. This restriction is meant to prevent abuse and ensure that the relief serves a genuine, long-term return to the country.
The return relief can be combined with the relief for families with four or more children, but the total of exempt revenue cannot exceed PLN 85,528 in the tax year. This restriction means that beneficiaries have to choose between different forms of exemption or combine them within a shared limit
Monitoring the use of the relief requires precise records of exempt revenue. Taxpayers must keep track of the amount of revenue benefiting from the preference on an ongoing basis so as not to exceed the annual limit. Exceeding the limit during the tax year means that the excess must be taxed at the standard rates.
The time limits of the relief also require attention. The four-year period of using the preference cannot be extended, regardless of how much of the exemption was used in individual years. After this period ends, all revenue is taxed under the standard rules, with no possibility of extending the relief.
Advantages and disadvantages of the return relief
The return relief offers significant financial benefits for people deciding to return to Poland from abroad. Its main advantage is the possibility of a tax exemption of up to PLN 85,528 a year for four years, which means a total of up to PLN 342,112 of exempt revenue (4 × PLN 85,528) over the entire period of using the preference – the tax saving itself is correspondingly lower and depends on the rate.
Main advantages of the return relief:
- High tax exemption of up to PLN 85,528 a year
- Four-year period of using the preference
- Flexibility in choosing the base year
- Wide range of covered revenue
- Possibility of combining with the relief for families with four or more children
- Universality for different forms of tax settlement
Main disadvantages and limitations:
- The relief can be used only once
- The annual limit may be insufficient for top earners
- Documentation and procedural requirements
- No possibility of carrying over unused limits
- Restrictive conditions regarding the period of residence abroad
Flexibility in choosing the base year allows the tax benefits to be planned optimally depending on the individual financial situation. Taxpayers can adjust the moment of starting the relief to their professional and income situation, maximising the benefits of the tax preference.
The wide range of revenue covered by the relief is an important advantage for people with diverse professional activities. The possibility of combining revenue from employment contracts, contracts of mandate and business activity under one relief increases its practical usefulness and availability.
The return relief can be particularly beneficial for people with good earnings, especially those who will be able to move to Poland without changing their employer. This group can make the most effective use of the tax preferences while maintaining a high level of income
The annual limit of PLN 85,528 may turn out to be insufficient for people with very high incomes, reducing the attractiveness of the relief for the highest-earning emigrants. For this group, the benefits of the relief may be proportionally smaller in relation to their total income.
Documentation and procedural requirements may be a barrier for some potential beneficiaries. The need to document the three-year period of residence abroad and the procedures related to the change of tax residence require proper preparation and may generate additional costs.
Using the relief in practice
Using the return relief in practice requires careful planning and knowledge of the detailed tax rules. The key element is correctly determining the moment of the change of tax residence and choosing the optimal base year for starting the preference.
Planning the use of the relief should take into account the expected income over the entire four-year period of the preference. Taxpayers with variable incomes may consider shifting the base year to make the most of the PLN 85,528 limit in the years with the highest revenue.
People running a business may consider optimising the structure of their revenue to make the most of the relief. This may include temporarily adjusting the scale of the business or spreading the completion of projects over time to stay within the annual exemption limits.
Combining different sources of revenue under the relief requires precise monitoring and record-keeping. Taxpayers must keep track of revenue from all sources covered by the preference on an ongoing basis so as not to exceed the annual exemption limit.
Monitoring the use of the relief requires keeping detailed records of all exempt revenue. Taxpayers should regularly check the amount of accumulated revenue to avoid unintentionally exceeding the annual limit of PLN 85,528
Working with a tax adviser can be particularly valuable when planning the use of the return relief. Professional advice will help plan a tax strategy optimally, taking into account the taxpayer's individual circumstances and financial goals.
Documentation of the use of the relief should be kept in a detailed and systematic way. Proper record-keeping not only makes tax settlements easier but also protects against possible problems in the event of a tax audit.
Comparison with other tax reliefs
The return relief is part of a broader system of tax preferences introduced under the Polish Deal. Compared with other reliefs, it has a specific beneficiary profile and level of benefits. The limit of PLN 85,528 a year makes it one of the highest tax reliefs available in the Polish tax system.
| Type of relief | Annual limit | Period of application | Access conditions |
|---|---|---|---|
| Return relief | PLN 85,528 | 4 years | Three years' residence abroad |
| Relief for families with four or more children | PLN 85,528 | No limit | Having four children |
| Start-up relief (ulga na start) | None (exemption from ZUS (Social Insurance Institution) social security contributions, not from PIT) | 6 months | First business or restart after 60 months |
| R&D relief | 200% of costs | No limit | R&D expenditure |
| IP Box relief | 5% tax | No limit | Revenue from IP |
Compared with the relief for families with four or more children, the return relief offers the same exemption limit but has more restrictive access conditions. While the relief for four or more children is available to all families meeting the demographic criteria, the return relief requires meeting specific conditions related to emigration and returning to the country.
The possibility of combining the return relief with the relief for families with four or more children is an additional advantage, although the combined limit remains at PLN 85,528 a year. This combination can be particularly attractive for families with children returning to Poland from abroad.
In the context of reliefs for entrepreneurs, the return relief offers wider possibilities than most standard tax preferences. It covers both business revenue and revenue from employment contracts, which makes it a universal tool supporting different forms of professional activity.
2022 was the first year in which taxpayers could use the return relief – it applies to people who moved their place of residence to Poland after 31 December 2021 (Article 53 of the Act of 29 October 2021, Journal of Laws (Dz.U.) 2021 item 2105). The rules do not provide an end date for the relief. Introducing this preference was a novelty in the Polish tax system
The durability of the return relief, covering a four-year period, exceeds most temporary tax preferences. This long-term nature allows stable financial and professional planning, which is a major advantage over short-term reliefs and exemptions.
The fact that the return relief can be used only once distinguishes it from most other tax preferences, which can be used repeatedly if the relevant conditions are met. This restriction underlines the strategic nature of the relief as a one-off tool supporting re-emigration.
Impact on migration decisions
The return relief was designed as a migration policy instrument influencing the decisions of Poles living abroad. The level of tax benefits offered may be an important factor in deciding whether to return to the country, especially for highly qualified and high-earning people.
Assessing the attractiveness of the relief requires a comparison with the tax conditions in the countries of emigration. For people living in high-tax countries, the Polish exemption may offer significant financial benefits, increasing the attractiveness of returning to Poland.
Flexibility in choosing the base year makes it possible to adjust the timing of the return to individual life and professional plans. Taxpayers can plan their return at the optimal moment, taking into account both tax benefits and other factors influencing the migration decision.
The long-term nature of the relief, covering a four-year period, provides financial stability in the initial period after returning. This support may be particularly important for people starting a new career or business in Poland.
The effectiveness of the return relief in encouraging re-emigration depends on many factors, including the economic situation in Poland and in the countries of emigration, professional opportunities and the individual life preferences of potential beneficiaries
The limitations of the relief, especially the one-off use and the annual limit, may affect its effectiveness as a migration policy tool. People considering a temporary return or unsure about the permanence of their decision may be less willing to use the relief.
A practical example: Ms Anna, a programmer who has lived in London for 5 years, is considering returning to Poland. Thanks to the return relief, she may save well over ten thousand Polish zloty in tax a year for 4 years – the exact amount depends on her income and tax rate. This amount may significantly influence her decision to return and help her in the initial period of adapting to the Polish labour market.
The complexity of the conditions and procedures related to the relief may be a barrier for some potential beneficiaries. The need to meet detailed criteria and properly document eligibility may discourage people from using the tax preference.
Outlook for the relief
The return relief, as a relatively new solution in the Polish tax system, may be subject to further modifications and improvements. Experience from the first years of applying the relief may lead to adjustments to the conditions, limits or application procedures.
Monitoring the effectiveness of the relief in encouraging re-emigration will be key to assessing its usefulness as a migration policy tool. Data on the number of beneficiaries and their characteristics may influence possible changes to the design of the relief.
Poland's economic development and changes in the international labour market may affect the attractiveness of the return relief. Rising wages in Poland and improving living conditions may increase the effectiveness of the relief as a factor encouraging people to return.
Harmonisation with other migration policy instruments and support programmes for returnees may make efforts to limit economic emigration more comprehensive and effective.
The future of the return relief will depend on its effectiveness in achieving the intended migration policy goals and on the general direction of the Polish tax system. Regular assessments and analyses of the impact of the relief on migration decisions will be key to its further development
A possible extension of the relief to new groups of beneficiaries or an increase in the exemption limits may be considered depending on Poland's economic and demographic needs. Flexibility in adjusting the parameters of the relief to changing conditions will be important for its long-term effectiveness.
Integrating the return relief with other forms of support for returnees, such as housing or professional programmes, may make the offer for potential re-emigrants more comprehensive and attractive.
