Relief for Companies Employing Reservists

 Relief for Companies Employing Soldiers

On September 26, 2024, the first reading of a government bill took place, aiming to encourage employers to hire soldiers of the Territorial Defence Forces and soldiers of the active reserve. The purpose of the government bill amending certain laws to support entrepreneurs employing Territorial Defence or Active Reserve soldiers is to encourage employers to hire OT and AR soldiers – individuals belonging to these groups who, although as a rule do not perform daily service in organizational units of the Ministry of National Defence, remain soldiers on active military service at all times. Therefore, they may be called upon at any time to perform service duties, which excludes the possibility of performing work duties under an employment relationship. What benefits are planned for employers in connection with the bill?

Main Assumptions

As indicated in Article 26he of the proposed act, a taxpayer deriving income from non-agricultural business activity may deduct from the tax base, determined pursuant to Article 26 paragraph 1 or Article 30c paragraph 2 of the Personal Income Tax Act, the amount of:

1. PLN 12,000 if an employee employed under an employment contract is a soldier of the Territorial Defence Forces or an active reserve soldier who has continuously served at least 1 year in the Territorial Defence Forces or the active reserve;
2. PLN 15,000 if the employee has continuously served at least 2 years in the Territorial Defence Forces or the active reserve;
3. PLN 18,000 if the employee has continuously served at least 3 years in the Territorial Defence Forces or the active reserve;
4. PLN 21,000 if the employee has continuously served at least 4 years in the Territorial Defence Forces or the active reserve;
5. PLN 24,000 if the employee has continuously served at least 5 years in the Territorial Defence Forces or the active reserve.

Importantly, a taxpayer who is a micro or small entrepreneur may increase the amounts mentioned above by a factor of 1.5, and a taxpayer employing at least 5 employees under an employment contract, who is not a micro or small entrepreneur, may increase the amounts by a factor of 1.2.

Summary

According to the bill, the new provisions are to enter into force 14 days after the date of publication in the Journal of Laws, with the tax relief provisions applying to income earned from 2025 onwards.

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