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Tax for PBO – new scheme

by Piotr Ziółkowski

29 June 2022

The amended PIT Act has increased the amount of due tax which a taxpayer can donate to a public benefit organisation to 1.5%.

There is also a new mechanism to facilitate the transfer of the tax amount to Public Benefit Organisations (PBO).

Who is covered by the new scheme?

The scheme will cover those who receive payments through pension authorities and who:

have earned no other income taxed according to the tax brackets in a tax year;
make no tax deductions;
do not file joint tax returns with a spouse;
earn no income abroad exempt from tax under double tax treaties;
are not obliged to deduct already deducted amounts.

How does the new scheme work?

The new legislation governs what happens when a taxpayer has not asked to transfer a part of due tax to a public benefit organisation.

In such a case, the money will go the organisation indicated by that taxpayer in the previous year, by virtue of the tax authority's request made on the tax portal. The whole process will not involve the taxpayer.

This setup exempts taxpayers from the annual obligation to specify the PBO if they want to donate 1.5% of their due tax to the same organisation.

The 1.5% of the due tax amount will be transferred to a PBO automatically until:

the taxpayer takes steps to specify a new organisation;
or the taxpayer chooses not to donate 1.5% of due tax amount to any PBO.

The new regulations will enter into force on 1 January 2023.

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