The method of accounting for tax on income received by foreigners in Poland depends on whether the person concerned has the status of the Polish tax resident. Foreigners with this status calculate such a tax in Poland under slightly different rules than non-residents.
1. Tax residence
The tax residence, the so-called “tax citizenship” is of primary importance in determining the rules for the taxation of income received by foreigners in Poland. The place of residence decides on having the tax residence in the country concerned. According to Article 3(1a) of the Personal Income Tax Act of 26 July 1991 (i.e. OJ 2021, item 1128, as amended), hereinafter referred to as the Act, a person residing in the territory of the Republic of Poland is an individual who:
- has a centre of personal or economic interests (centre of vital interests) in Poland or
- stays in the territory of the Republic of Poland for more in 183 days in a tax year.
These conditions are alternative. The fulfilment of one of them is sufficient to state that the person concerned has the tax residence in Poland.
It is assumed that a foreigner “has his/her centre of vital interests” in Poland if most of his/her personal or economic connections are in this country. It was pointed out by the Voivodeship Administrative Court in Lodz at the judgment of 5 October 2017, ref. I SA/Łd 493/17. In the view of the Court: “When assessing which country is the centre of vital and professional interests of an individual, the following things should be primarily taken into account: the personal and economic connections of the natural person with the country concerned among which family ties, social ties, employment, political, cultural and any other activity are important, as well as the location of economic activity, place from which the person manages his/her property.”
When calculating whether a foreigner stays in Poland for 183 days, days of physical presence are taken into account. All other days spent there are counted, including weekends, holidays, leaves, days of illness, as well as the day of arrival and departure.
A foreigner who will be recognised as a Polish tax resident is subject to unlimited tax liability in Poland. In other words, he/she is liable to taxation of all his/her income (revenue) regardless of the location of its sources (Article 3(1) of the Act). Persons who haven’t tax residence in Poland are subject to limited tax liability. Therefore, they must pay tax on income (revenue) earned in the territory of the Republic of Poland (Article 3(2a) of the Act).
2. Tax settlement made by a foreigner who is a Polish tax resident
Foreigners with Polish tax residence make tax settlements under the same conditions as Polish citizens with tax residence in Poland. In practice, it means that the foreigner should receive the PIT-11 information from his/her employer/principal. This information should be provided to the taxpayer by the end of February of the year following the tax year. If the taxpayer submits an appropriate request, PIT-11 should be presented within 14 days from the date of lodging the application.
The annual declaration should be submitted to the tax office by the end of April of the year following the tax year.
If a foreigner – a Polish tax resident – has obtained income in Poland and abroad, he/she should pay tax in Poland on the entire income received. In such a case, when making tax settlement, the provisions of the relevant double taxation conventions should also be applied.
3. Tax settlement made by a foreigner who isn’t a Polish tax resident
The rules for tax settlement made by a foreigner who hasn’t the status of a tax resident in Poland differ slightly from the rules presented above for foreigners with Polish tax residence.
Article 29(1)(a) of the Act provide for the taxation of income received by foreigners – non-residents with a lump sum of 20% of revenue. However, this form of taxation concerns income from strictly defined sources. These are:
- revenues from the activities specified in Article 13, points 2 and 6-9 of the Act,
- interest income other than those mentioned in Article 30a(1) of the Act,
- revenue from copyrights or related rights, from inventive projects, trademarks and ornamental designs, including the sale of these rights, from receivables for disclosing the secret of a recipe or production process, for the use or right to use an industrial, commercial or scientific equipment, including means of transport, as well as for information related to experience gained in the industrial, commercial or scientific field (know-how).
If the revenue of a foreigner – non-resident is subject to lump-sum taxation, the payer should provide him/her with IFT-1R – Information on revenue (income) obtained by natural persons who don’t have their place of residence in the Republic of Poland. The deadline for providing the taxpayer with the IFT-1R information is the same as PIT-11.
A foreigner who has received the IFT-1R information doesn’t submit an annual tax return in Poland. He/she calculates the tax in the country where he/she has his/her tax residence. However, when a foreigner – non-resident:
- has the residence for tax purposes in a Member State of the European Union other than Poland or in another country belonging to the European Economic Area or in the Swiss Confederation, and
- documented his/her residence for tax purposes with a certificate of residence
the revenue obtained, subject to taxation in the territory of the Republic of Poland, may, on a request made in the annual return, be taxed according to the tax scale. In such a case, the lump sum income tax charged on this revenue is treated as equal to the advance income tax collected by the payer (Article 29(4) of the Act).
A foreigner – non-resident who receives income from a business relationship, employment relationship, home based work or cooperative employment relationship should tax it on the general principles. This means that received revenue should be taxed according to the tax scale and the foreigner should submit an annual return in Poland.
4. Competent Tax Office
The competence of tax offices should be determined in accordance with the principles set out in the Regulation of the Minister of Finance of 22 August 2005 on the jurisdiction of tax authorities (i.e. Official Journal of 2022, item 565, as amended), hereinafter referred to as the Regulation.
§ 4(1) of the Regulation applies to the determination of the tax office competent for a Polish tax resident. This provision states: The territorial jurisdiction of tax authorities in matters of personal income taxation is established according to individual’s place of stay if he/she hasn’t a place of residence in the territory of the Republic of Poland.
Thus, for a Polish tax resident, including a resident who is a foreigner, the competent tax office is the tax office of his/her place of residence in the Republic of Poland, and in the absence of such a place, the tax office of his/her place of stay.
The determination of the tax office responsible for a foreigner – non-resident looks more complicated. For a non-resident, the competent tax office is specified on the basis of:
- the tax payer’s place of residence or registered office address – if tax collection occurs through the payer,
- the tax payer’s place of stay – if tax collection occurs without the intermediary of the payer,
- the place of performance of activities for which the revenue is obtained, in particular as regards the place of the supply of services (of the performance of work) – if the jurisdiction can’t be determined in the manner indicated above (§ 5(2)(2) of the Regulation).
However, in such a case, the tax authority competent for each voivodeship is:
- in the Lower Silesian Voivodeship – the Head of Wrocław Psie Pole Tax Office;
- in the Kuyavian-Pomeranian Voivodeship – the Head of the Second Tax Office in Bydgoszcz;
- in the Lublin Voivodeship – the Head of the First Tax Office in Lublin;
- in the Lubusz Voivodeship – the Head of the First Tax Office in Zielona Góra;
- in the Łódź Voivodeship – the Head of Łódź-Śródmieście Tax Office;
- in the Lesser Poland Voivodeship – the Head of Cracov-Śródmieście Tax Office;
- in the Masovian Voivodeship – the Head of the Third Tax Office for Warsaw-Śródmieście;
- in the Opole Voivodeship – the Head of the First Tax Office in Opole;
- in the Subcarpathian Voivodeship – the Head of the First Tax Office in Rzeszów;
- in the Podlaskie Voivodeship – the Head of the First Tax Office in Białystok;
- in the Pomeranian Voivodeship – the Head of the First Tax Office in Gdańsk;
- in the Silesian Voivodeship – the Head of the First Tax Office in Katowice;
- in the Świętokrzyskie Voivodeship – the Head of the Second Tax Office in Kielce;
- in the Warmian-Masurian Voivodeship – the Head of the Tax Office in Olsztyn;
- in the Greater Poland Voivodeship – the Head of Poznań-Nowe Miasto Tax Office;
- in the West Pomeranian Voivodeship – the Head of the Third Tax Office in Szczecin.
The identifier of the taxpaying natural person in the tax documents is the PESEL number. According to Article 3(1) of the Act of 13 October 1995 on the principles of registration and identification of taxpayers and payers (i.e. OJ 2022, item 166, as amended), the tax identifier is:
- PESEL number – in the case of taxable persons who are individuals not registered for VAT or who don’t conduct an economic activity;
- NIP (tax identification number) – for other entities subject to the registration obligation referred to in Article 2.
The obligation to have a PESEL number applies to all taxpayers making tax settlement in Poland – both Polish citizens and foreigners – residents and non-residents.
6. Legal notice
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