It isn’t uncommon for employees working in several countries to be requested to present a certificate of residence. This document indicates which country the worker is a tax resident of and where he/she is subject to unlimited tax liability.
1. Certificate of tax residence
From the point of view of tax law, the certificate of residence is an extremely important document. It shows that the person indicated in this certificate has tax residence in the country whose authority issued such a document. According to Article 5a, point 21, of the Personal Income Tax Act of 26 July 1991 (i.e. Official Journal of 2021, item 1128, as amended), the certificate of tax residence is an attestation of the taxpayer’s residence for fiscal purposes, issued by the competent tax administration of the state of the taxpayer’s residence.
A natural person will be considered a Polish tax resident if he/she has a centre of personal or economic interests (centre of vital interests) in Poland or stays in the territory of this country for more in 183 days in a tax year (Article 3(1a) of the PIT Act). The above criteria are alternative – the fulfilment of one of them is sufficient for a person concerned to be regarded as a Polish tax resident. If an individual is considered to be a Polish tax resident, he/she is liable to taxation of all his/her income (revenue) regardless of the location of sources of revenue. This is the so-called unlimited tax liability (Article 3(1) of the PIT Act). Natural persons who aren’t Polish tax residents are subject to limited tax liability. This means that they pay taxes in Poland only on the income (revenue) earned in the territory of the Republic of Poland (Article 3(2) of the PIT Act).
2. What period the certificate of residence concerns?
The certificate of residence refers to the past or present state. However, it cannot concern the future. Moreover, it’s valid until the facts confirmed therein change. This was confirmed by the Director of the Tax Chamber in Warsaw in a letter of 26 April 2010, IPPB2/415-103/10-3/MR: “a certificate of residence is a document issued by the competent tax administration, confirming a specific factual situation – the place of residence of the taxpayer for tax purposes, which in the case of personal income taxpayers is the domicile. By issuing such an attestation, the competent authority confirms that – at the time of issuing this document or for the moment specified therein – the facts stated in its content correspond to those ones resulting from the records, registers kept by this authority or from other data held by it. Thus, the certificate can only relate to existing, i.e. present or past facts, never to future factual circumstances.”
The certificate of residence may contain information for which period it was issued. If this document doesn’t indicate its period of validity, the payer, when the tax is collected, takes into account this certificate for the next twelve months from the date of its issue (Article 41(9a) of the PIT Act). However, in the event of the change of the taxpayer’s place of residence for tax purposes within the indicated period, he/she is obliged to forthwith document the place of residence for tax purposes with a new certificate of residence (Article 41(9a) of the PIT Act).
3. Obtaining a certificate of residence
The certificate of residence is issued at the request of the taxpayer (Article 306l of the Act of 29 August 1997 on the Tax Ordinance (i.e. OJ 2021, item 1540, as amended). The application is submitted on the official form: Application for a certificate of residence or registered office for tax purposes – Tax Residence Certificate (CFR-1).
The authority competent to consider the case is the Tax Office with jurisdiction over the applicant’s place of residence on the day of submitting the request.
The application may be made electronically as an attachment to the general letter at the e-Tax Office, or via e-PUAP to the competent tax office. It can also be submitted in paper form to the appropriate Tax Office or to the Service Centre (units are located throughout the country). Paper submission may also be sent to the competent tax office via the postal operator.
Submitting the application requires the payment of a fee of PLN 17. The proof of payment of the fee due for application should be attached to the request.
A certificate of residence can be applied for in person or by proxy. However, in the event of acting through an agent, the application must be accompanied by the power of attorney document and proof of payment of stamp duty on the power of attorney (PLN 17).
The Tax Office examines the application for a certificate of residence within 7 days. If it’s granted, the authority issues such a certificate. The Tax Office may also decide to leave the request without consideration or to refuse to issue a certificate or attestation with the requested content.
4. Content of the certificate of residence
The content of the certificate of residence hasn’t been defined by law. However, guidance on the content of the document can be found in the statements made by the tax authorities. Worthy of particular attention is the individual interpretation of the Director of the Tax Chamber in Bydgoszcz of 12 June 2008, ITPB3/423-211/08/AM. The Director of the Tax Chamber indicated: “It’s understandable that the form of the certificate of residence isn’t specified, because it’s impossible to regulate matters related to the issuance of official documents by foreign tax administrations in Polish tax law. The definition of residence in international tax law results from double taxation conventions in the area of income and wealth. The definition of residence in international tax law results from double taxation conventions in the area of income and wealth. It results from the content of these provisions that the certificate of residence should fulfil at least the following conditions:
- be issued by the competent tax administration,
- determine the taxpayer’s place of residence (domicile or registered office) for tax purpose,
- include the date of issue of the certificate and/or the date on which tax residence is confirmed.
Therefore, each certificate issued by the competent tax authority (valid on the date of payment) and confirming the entity’s tax residence in this country is sufficient.”
5. Legal notice
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