For many years, the issue of the qualification of the expenses incurred by the employer for the accommodation of workers posted abroad has stirred up strong feelings. For a long time, the prevailing view was that the expenses in question constituted the worker’s revenue, subject to taxation. Recently, a new line of case-law, presenting a completely different viewpoint, has emerged in the jurisprudence of the Supreme Administrative Court.
1. Polish legal regulations
According to Article 12(1) of the Personal Income Tax Act of 26 July 1991 (i.e. Official Journal of 2025, item 163, as amended), hereinafter referred to as the Act, revenue from a business relationship, employment relationship, home based work and cooperative employment relationship is deemed to include all types of cash payments and the monetary value of benefits in kind or their equivalents, regardless of the source of financing of these payments and benefits, in particular: basic salaries, payments for overtime, various types of supplements, awards, equivalents for unused leave and all other amounts, regardless of whether their value has been determined in advance, as well as cash benefits incurred for the employee and the value of other unpaid benefits or partly paid ones.
In connection with the content of the above provision, it’s assumed that free accommodation provided to workers by the employer constitutes a gratuitous benefit and thus an additional component of remuneration. Its value is determined according to the equivalent of the rent that would be payable in the event of the conclusion of a lease agreement for such premises or building (Article 11(2a)(3) of the Act).
The benefits in question are subject to taxation, but only partially. The provision of Article 21(15) of the Act exempts from income tax the value of benefits incurred by the employer for accommodation of workers up to an amount not exceeding PLN 500.00 per month. In practice, this means that if the value of the free accommodation provided to the worker by the employer exceeds PLN 500.00, only the excess over the amount of PLN 500.00 is taxed.
The legislator has stipulated that the exemption applies only to employees whose place of residence is outside the locality where the workplace is located and the taxpayer doesn’t benefit from increased tax deductible costs (Article 21(14) of the Act).
Świadczenie niematerialne w postaci zapewnienia pracownikom przez pracodawcę bezpłatnego zakwaterowania podlega również składkom na ubezpieczenia społeczne. Podstawę wymiaru składek ustala się w następujący sposób:
- for cooperative premises of the tenant or ownership type – in the amount of the rent applicable to such premises in a given housing cooperative,
- for municipal premises – in the amount of the rent set for such premises by the municipality,
- for ownership premises, excluding those mentioned in heading a, as well as houses constituting private property – in the amount of the rent determined according to the rules and rates for municipal apartments in a given area, and in cities – in a given district,
- for hotel premises – at the cost documented by bills issued by the hotel (§ 3, point 3, of the regulation of the Minister of Labour and Social Policy of 18 December 1998 on detailed rules for establishing the basis for assessment of contributions to the pension scheme (i.e. OJ 2025, item 316, as amended)).
2. Change in the case-law of administrative courts
So far, tax authorities and administrative courts have taken the view that the provision of free accommodation by an employer to employees posted to work abroad constitutes, for those workers, revenue from the employment relationship subject to personal income tax, as well as to social security contributions. Taxation and social security contributions of the benefit in question should occur in accordance with the provisions cited above.
As justification for this view, it was pointed out that the expenses paid by the employer in order to provide free accommodation to the workers are incurred in the interest of the employees. Indeed, the posted workers’ accommodation at the place where they carry out their employees’ duties isn’t related to the work process itseft, but serves to satisfy the basic living needs of the employees. In the event that the employer covers the cost of accommodation, a gratuitous benefit arises and it constitutes taxable revenue of the worker.
Since mid-2023, we have been noticing a radical change in the presented case-law. The view that the employer’s coverage of the accommodation costs of employees posted to work abroad doesn’t constitute revenue from the employment relationship for the worker has gained approval.
3. New line of case law
The judgment of 1 August 2023, ref. II FSK 270/21 is that one in which the Supreme Administrative Court (Naczelny Sąd Administracyjny, hereinafter: NSA) stated that the employer’s coverage of the costs of accommodation for workers posted abroad doesn’t constitute revenue for these employees. In the aforementioned decision, NSA clearly departed from the previous line of case law. It took the view that, according to Article 3(7) of Directive 96/71/EC, expenses incurred by the employer for the provision of accommodation to workers posted to work abroad shouldn’t be considered as part of their remuneration. They don’t constitute a benefit for the workers and lie entirely on the posting employer.
NSA repeated the above view in the justification of two judgments of 9 January 2024: ref. II FSK 434/21 and ref. II FSK 1332/21. Both decisions contain the following statement of NSA: it clearly results from Directive 96/71/EC that the provision of free accommodation by the employer to workers posted abroad doesn’t constitute a gratuitous benefit and can’t be considered an element of remuneration.
In the justification of the judgment with the reference number II FSK 434/21, NSA noted: “since the expenses for providing accommodation to posted workers are incurred in the interest of the employer and not of the employees, these workers don’t receive a gratuitous benefit and, therefore, don’t obtain revenues from the employment relationship in respect of it, within the meaning of Article 12(1) of the Personal Income Tax Act (…) It may be added that, although Directive 96/71 undoubtedly doesn’t directly concern fiscal issues, due to the impact on the definition of revenue from the employment relationship of employees seconded to work in the provision of services abroad, it also has an indirect effect on the determination of revenue from employment relationship by eliminating from these revenues all benefits and costs reimbursed for organising the worker’s stay abroad.”
The judgment in case with the reference number II FSK 1332/21 reiterated the cited position.
4. Legal notice
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