Winnings in a contest in Poland are subject to a 10% flat tax on the whole value of the prize, unless they benefit from an exemption. The tax is normally collected and paid by the organiser as remitter, and for a non-cash prize the winner must hand the organiser the tax amount before collecting it. The situation is different when the prize is received in connection with a business or from an employer.
The basic rule: 10% of the whole value
Under Article 30(1)(2) of the PIT Act, 10% tax is withheld on winnings in contests, games and betting, and on prizes connected with promotional sales. This applies to prizes obtained in Poland and in another European Union or European Economic Area country.
Important: if the prize exceeds the exemption threshold, the tax is calculated on the whole value, not on the surplus above the threshold. A prize worth PLN 2,100 means PLN 210 of tax, not PLN 10.
Winnings taxed at the flat rate are not combined with other income and are not entered into the annual return. The settlement ends at the moment the prize is handed over.
When winnings are exempt
| Type of winnings | Exemption |
|---|---|
| Contests and games organised by press, radio and television | up to PLN 2,000 per occasion |
| Scientific, cultural, artistic, journalistic and sporting contests | up to PLN 2,000 per occasion |
| Prizes from promotional sales (e.g. "buy a product and receive a prize") | up to PLN 2,000 per occasion, but not for prizes obtained within one's own business activity |
| Number games, money lotteries, promotional lotteries, betting | up to PLN 2,280 per occasion |
| Casino and slot machine games operated legally in the EU or EEA | exempt with no cap |
The source of the limits is Article 21(1)(6a) and (68) of the PIT Act. A contest announced on social media by an online shop does not always fall within the category of "mass media" — whether the exemption applies depends on the nature of the organiser and the contest. In doubtful cases, it is worth reading the rules, in which the organiser usually sets out their approach to tax.
Who pays the tax and when
The contest organiser is the remitter. This means they:
- calculate the tax on the value of the prize,
- withhold it on handing over a cash prize or — for a non-cash prize — collect the tax amount from the winner before handing it over (Article 41(7)),
- transfer the amount withheld to the tax office no later than the 20th day of the following month (Article 42(1)),
- after the end of the year, by the end of January, file the annual remitter's return (PIT-8AR).
The winner does not receive a PIT-11 information nor settle the winnings in the annual return, provided the remitter correctly withheld the tax. The place of this flat tax among other levies is discussed in the guide to types of taxes in Poland.
Non-cash prize — an example with an added cash amount
Organisers often add a small cash amount to a non-cash prize, from which they withhold the tax. The winner then does not need to pay anything extra.
Example: the prize is a bicycle worth PLN 4,500 and an additional PLN 500 in cash. The total prize value is PLN 5,000, and 10% tax is PLN 500. The organiser retains the cash amount for the tax, and the winner collects only the bicycle. Without the additional amount, the winner would have to transfer PLN 450 to the organiser before collecting the bicycle.
The value of a non-cash prize is essentially its market price. If the winner does not pay the tax, the organiser may refuse to hand over the prize — the rules usually provide for forfeiture in such a case.
When settlement looks different
A prize in connection with business activity
If an entrepreneur wins a prize in a contest connected with their business (e.g. a sales contest for a supplier's trading partners), the prize is usually revenue from the business and is settled according to the company's chosen tax form, not under the 10% flat tax. The Act expressly excludes the exemption for promotional-sales prizes obtained in business activity.
A contest organised by the employer
A prize from one's own employer, e.g. for sales results or in an internal contest, is as a rule treated as income from the employment relationship and is subject to general taxation and social contributions.
Winnings from outside the EU and EEA
The 10% flat tax applies to winnings obtained in the EU or EEA. A prize from another country requires separate analysis — it may be taxed on general rules in the annual return, taking into account the double taxation treaty.
What to watch out for as an organiser
Companies running promotional contests often forget that they are the ones responsible for withholding the tax. Before launching the campaign it is worth:
- determining whether the prizes fit within the exemption and describing it in the rules,
- planning an additional cash amount for the tax on non-cash prizes,
- collecting the winners' data needed for the settlement,
- keeping to the payment deadline of the 20th of the following month and to the annual return.
The cost of prizes and additional amounts may qualify as advertising expenditure — the rules are described in the article on advertising costs in business.
How Good Balance can help
We advise winners in unusual situations (foreign prizes, winnings linked to business activity) and help organisers prepare the rules and the remitter's settlements. When the classification of a prize raises doubts, we prepare an application for an individual tax interpretation, which provides protection against a different assessment by the tax office.