Double taxation of Polish tax residents with Austrian income has been avoided by Poland sometimes by applying the exemption method and sometimes by applying the credit method. The latter has been in force since 2019 and was introduced as a result of the MLI. A comparative analysis of the Austrian and Polish tax rates shows a possible additional tax burden on lower incomes resulting from the credit method. This burden can be reduced by the Polish „switch-over clause“, whereby a significant limitation of this tax relief has to be taken into account. Furthermore, a planned increase of the minimum exempted income in Poland can provide for a significant reduction in the additional tax burden.
