Instructions for taxing foreign earnings

The basic criterion for establishing a tax obligation in Poland is the place of residence of the taxpayer.

For a person residing in the territory of the Republic of Poland, according to Article 3(1a) Act on 26 July 1991 on personal income tax 1 (hereinafter: u.p.d.o.f.) a natural person who: 1) has in the territory of the Republic of Poland a centre of personal or economic interests (the centre of life interests) or 2) stays in the territory of the Republic of Poland longer than 183 days in the tax year.

This provision applies taking into account the relevant double taxation agreement (hereinafter: UPO) to which Poland is party (Article 4a u.p.d.o.f.).

1. Comment

1.1. Tax duty

There is no specific definition of ‘personal interest centre’ and ‘economic interest centre’ in u.p.d.o.f. legislation. The following rules are based on the OECD Model Tax Convention on Income and Assets 2 (hereinafter referred to as the OECD Model Convention), double taxation agreements and shaped case law. The definition of ‘personal interest centre’ and ‘economic interest centre’ was presented, for example, by the Director of KIS in an individual interpretation from 9 October 2018

Individual interpretation of the Director of KIS from 9 October 2018 3

When making arrangements for the centre of economic interest, account should be taken of the place of commercial activity, sources of income, investments held, immovable and movable property, insurance policies, loans drawn up, bank accounts, etc. The ‘personal interest centre’ should mean any family relationship, i.e.

a home outbreak, social, political, cultural, civic, membership of organisations/clubs, hobbies, etc. In turn, the ‘economic interest centre’ is primarily the place of commercial activity, sources of income, investments held, real estate and movable property, insurance policies, loans drawn, bank accounts, etc.

In turn Article 4 A comment to the OECD Model Convention indicates that all possible circumstances that may be relevant to the decision with which the State has a closer personal and economic relationship (e.g.

family and social connections of the person concerned, occupations, place of business, place where the person manages his or her assets, and any other activity, including political and cultural).

When considering the criterion of “staying in Poland longer than 183 days in the tax year” is calculated the days of the actual presence of the taxpayer in Poland.

The provisions of the double taxation agreements clarify the calculation of the required 183 the days of stay in the country concerned. Distinguishing two methods of calculating this time of stay:

• 1) Total 183 days during a twelve-month period beginning or ending in a given tax year,
• 2) time one or several periods not exceeding cumulatively 183 days in a given tax year.

Example

A worker seconded to work in Germany stayed there since 1 October 2018 to 31 May 2019, i.e. for 80 days In 2018 and by 110 days In 2019 The total duration of stay in Germany was 190 days. In this case, the remuneration of the employee for working in Germany, both for 2018, as well as 2019, should be taxed in this country. Period of stay beginning In 2018 and ending In 2019 exceeded total 183 days and both stays were in 12-monthly period starting In October 2018 and ending In September 2019

According to the comment to the OECD Model Convention, the calculation of the length of stay in a given country is done by applying a method based on ‘days of physical presence’. They shall not include the days on which the taxable person was abroad.

The days of stay abroad include the day of departure from Poland and arrival in the country, and Saturdays and Sundays, national holidays, holidays before, during and after the end of the activity, short breaks (training, strikes, closure of the company, delivery delay), sick days (except for events preventing a person from leaving who could, in a given case, obtain tax exemption) and days taken due to death in the family or family sickness.

Important: in principle, whether a foreigner stays in Poland longer than 183 days in a given year should be made separately in each tax year.

If, within the meaning of the laws of both Contracting States, a person is resident in both States, his or her residence shall be determined in accordance with the following rules as laid down in the double taxation agreements:

1. a person is considered to be resident only in the country where he has his permanent residence. If it has a permanent residence in both countries, it shall be considered to be resident only in a country with which it has a closer personal and economic relationship (the centre of life interests);
2. if it cannot be established in which State the centre of interests of life is situated or if it does not have a permanent residence in any of the countries, it shall be deemed to have a residence in the country in which it normally resides;
3. if it normally resides in or does not usually reside in any of the two countries, it shall be deemed to be resident in the country of which it is a national;
4. if the person is a national of both States or is not a national of either State, the competent authorities of the States shall settle the matter by mutual agreement.

Example

Mr Jan has both Polish and German citizenship. As a pensioner, he lives in both countries in his home for a comparable period. Mr. Jan has no family. Therefore, the mutual agreement between Poland and Germany determines the place of its tax residence.

1.2. Tax residence certificate

According to Article 5a(21) u.p.d.o.f. residence certificate means a certificate of the place of residence of the taxable person for tax purposes issued by the competent authority of the tax administration of the State — the place of residence of the taxable person.

Where the place of residence of the taxpayer for tax purposes has been documented by a residence certificate containing the period of validity, the payer shall take that certificate into account for payments made during that period. Where the place of residence of the taxable person for tax purposes has been documented by a residence certificate not containing the period of validity and indicating the tax year of the foreign counterparty, the payer shall take that certificate into account for payments made during the period 12 months from the date of issue of the certificate.

There is no universal formula for a tax residence certificate. Each country shall specify its own requirements for the issue and model of the certificate certifying the relevant tax residence. Such a position was presented by the Director of IS in Bydgoszcz in an individual interpretation from 12 June 2008

Individual interpretation of the IS Director in Bydgoszcz with 12 June 2008 4

„The definition of residence in international tax law results from double taxation agreements on income and property. Since these agreements do not specify the applicable form of residence or residence certificate, the residence certificate is not always issued on formalised printing and it does not need to explicitly contain the name ‘the residence certificate’. It follows from these provisions that the residence certificate should comply with at least the following conditions: to be issued by the competent tax administration, to specify the place of residence of the taxpayer for tax purposes, to include the date of issue of the certificate and/or the date on which the tax residence is confirmed.

Therefore, any certificate issued by the competent tax authority (current at the date of payment) which confirms that the entity has a tax residence of that State is sufficient. (...) It is understandable that the form of a residence certificate cannot be defined because the issue of issuing official documents by foreign tax administrations cannot be regulated in Polish tax law."

1.3. Scope of taxation in Poland of non-resident revenues

Natural persons who do not have a place of residence in the Republic of Poland shall be liable to tax only on income generated in the territory of Poland, and in particular from:

• 1) work carried out in the territory of the Republic of Poland on the basis of a business relationship, employment relationship, overlay work and cooperative employment relationship, regardless of the place of payment of remuneration,
• 2) activities carried out personally in the territory of Poland, regardless of the place of payment of remuneration,
• 3) economic activity carried out in the territory of Poland,
• 4) located in the territory of Poland, including the sale of such real estate. Subject to Article 4a Regulations Article 3(1)(1a)(2a)(2b) u.p.d.o.f. shall apply taking into account double taxation agreements to which Poland is party[5].

The following are issues on the basis of an agreement with 14 May 2003 between the Republic of Poland and the Federal Republic of Germany on the avoidance of double taxation on income and property taxes 6 (hereinafter referred to as UPO PL-RFN).

1.3.1. Employment contract

Based on Article 3(2b) u.p.d.o.f.

as income (income) generated in the territory of the Republic of Poland, among others, income (income) from work carried out in the territory of Poland on the basis of business relationship, employment relationship, placement work and cooperative employment relationship, regardless of the place of payment of remuneration.

The employment of a foreigner in Poland in the framework of the employment relationship is calculated similarly as a Polish worker – the only derogation is the need to submit tax returns to the tax office competent for foreign persons.

According to Article 15(1) UPO PL-RFN wages and similar salaries which a person resident in Germany receives from employed employment shall be taxable only in Germany, unless employment is carried out In the second country (Poland). If the work is so done, the remuneration received for it may be taxed including second country (Poland).

Remuneration of a person resident in Germany received for the work carried out In the second the State (Poland) will be taxed only in Germany if they are met together three conditions:

• 1) staff member In the second country (Poland) for a period or periods not exceeding total 183 days during the period twelve months beginning or ending in a given tax year, and
• 2) remuneration shall be paid by the employer or on behalf of the employer who is not resident or established In the second country (Poland), and
• 3) the remuneration is not borne by the undertaking which the employer holds In the second country (Poland). If not met one or more of the above conditions, the employee's remuneration will be subject to taxation in the country where he works (Poland).

Where the employee's remuneration is determined in foreign currency, it shall be converted into Polish gold at the average foreign currency rate announced by the NBP on the last working day preceding the day of receipt of income (Article 11a u.p.d.o.f.).

Example

The company based in Szczecin hired Mr. Hans Mueller on the basis of an employment contract with net remuneration 5,000 EUR. In order to make a payment to be converted into Polish gold costs, the average rate announced by the NBP on the last working day preceding the day of the payment of the remuneration to the worker in foreign currency (i.e. the average rate announced by the NBP on the last working day preceding the day of the list of wages.

This was the position of the IS Director in Warsaw in an individual interpretation with 8 September 2010 7 .: „The employment of a foreigner in Poland on the basis of an employment contract causes the need to tax the income generated in Poland, regardless of whether the foreigner is a Polish resident. or not. As regards the need to pay social and health contributions for foreigners employed under the employment contract, he commented in an individual interpretation of the 23 March 2028 ZUS Branch in Gdańsk’.

Individual interpretation ZUS Branch in Gdańsk 23 March 2018 8

„When a Polish employer enters into a contract of employment with a foreigner, whose contract specifies the place of work in Poland, and this employee proves his work in Poland, there is an insurance obligation for ZUS in Poland, regardless of his nationality."

Example

Ms Rebecca Schoen is employed as an assistant to the Management Board of the Polish company, with a gross monthly salary of 9,600 PLN. Mrs. Rebecca's payroll with the burden will look like this:

Gross remuneration: 9,600 PLN.

Social security contributions: 1,316.16 PLN.

Grounds for the contribution to health insurance: 8,283.84 PLN.

Health insurance premium: (9%): 745.55 PLN.

Health insurance premium, deductible (7.75%): 642 PLN.

Revenue costs: 250 PLN.

Grounds for calculating the advance on income tax: 8,034 PLN.

Advance on income tax (17%): 1,322.02 PLN.

Advance payment due for income tax: 680 PLN.

Net remuneration: 6,858.29 PLN.

The Social Insurance Institution in Poland is not subject to the obligation of employees – foreigners, employed by Polish entities whose place of work is defined in the employment contract outside Poland and who only provide work there. This is how the ZUS Branch in Lublin said in an individual interpretation with 25 November 2015 Individual interpretation of ZUS Branch in Lublin with 25 November 2015 9

Polish social security regulations are not subject to foreign nationals employed by Polish entities, but the place of their work is defined in the employment contract outside Poland. If the place of work has been defined abroad and work is done there, the employed foreigner is not an employee in Poland.

The company, as an income tax payer for remuneration from a contract of employment paid to a foreigner, is obliged – according to Article 31u.p.d.o.f.

• to collect and withdraw advances on income tax. The amount of the advance shall be determined in accordance with Article. 32 u.p.d.o.f., which does not differentiate people living in Poland and abroad. The payer is also required to produce and send in electronic form by the end of January of the following tax year of the declaration PIT-4R and PIT-11. Information PIT-11 the employer is obliged to provide the employee by the end of February of the following year.

1.3.2. Contracts-Order and Work

Revenues from orders or works contracts obtained exclusively from a natural person conducting an economic activity, a legal person and its organisational unit and an organisational unit having no legal personality, in the light of u.p.d.o.f., shall be treated as revenue from the activities carried out in person, which are referred to under Article 13(8) point (a) u.p.d.o.f. The manner of taxation of revenues from the activity performed is dependent on the status of foreigner: whether he is a Polish resident or not.

In a situation where a foreigner is a Polish resident, the contracting entity is obliged to make its tax settlement on the same terms as in the case of employment of a Polish citizen. The tax rate for non-residents is 20% (according to Article 29 u.p.d.o.f.).

This principle shall apply taking into account double taxation agreements to which the Republic of Poland is party.

However, the application of the tax rate resulting from the relevant UPO or the non-payment (non-payment) of the tax in accordance with such a contract is possible provided that the taxable person's residence certificate obtained from him is documented for tax purposes.

The determination of the tax residence is also permitted by making a statement by the person employed. The payer may use a declaration made by the client to establish the tax residence of the foreigner, as confirmed by the Director of the CIS in an individual interpretation from 19 July 2019 10 . Tax collected by the payer 20% or at the appropriate rate resulting from UPO according to Article 42(1) u.p.d.o.f. is transferred to the tax office to 20. the day following the month in which the remuneration was paid.

In double taxation agreements, the issue of taxation of contract or work should be reviewed in the context of so-called free trades.

According to Article 14 UPO PL-RFN income which a person resident in Germany derives from a free profession or from any other activity of his own character shall be taxable only in Germany, unless he has a permanent establishment in Poland for the purpose of carrying out his business.

If it has such a permanent establishment, then income can be taxed in Poland, but only to the extent that it can be attributed to this permanent establishment.

The term ‘free profession’ includes, in particular, self-executed scientific, literary, artistic, educational or educational activities as well as self-executed activities of doctors, lawyers and legal advisers, engineers, architects, dentists, tax advisers and auditors.

In this category, in the absence of different arrangements in double taxation agreements, account should also be taken of contract or contract of works.

The payer shall make a declaration by the end of January of the following year. PIT-8AR, and, if the payer ceases to operate before that date, until the date on which that activity ceases. By the end of January of the following year, the company should make an electronic declaration IFT-1R.

Office competent to send IFT-1R is a tax office competent in matters of taxation of foreign persons. The company is obliged to transfer to a foreigner who is not a Polish resident, employed under a contract-order or work contract, IFT-1R by the end of February of the following year.

The time limit for sending the IFT-R declaration at the request of the taxpayer shall expire within the time limit 14 days from the date of application.

At the same time, it should be pointed out that according to the provisions of the Act of 13 October 1998 on the social security system 11 and the Public-funded Health Care Services Act 12 , natural persons who, on the territory of the Republic of Poland, perform work on the basis of, inter alia, contract-orders, in principle are subject to voluntary sickness insurance and compulsory pension, pension, accident and health insurance.

A work contract shall not be entitled to cover its social and health insurance, except where its activities are carried out for the benefit of the employer or has been concluded with the employer.

The following is a summary of the differences in wages according to the status of the foreigner and the documents submitted. It was assumed that a foreigner is subject to compulsory social and health insurance only in Poland. At the same time, German citizens will not have German social security legislation (in the context of Article 11(1) Regulation (EU) 883/2004 to 29 April 2004 on the coordination of social security systems)[13].

The following calculations (PLN data) apply third options:

• 1) German resident in Poland,
• 2) a German national who is a non-resident in Poland who has not submitted a tax residence certificate,
• 3) a German citizen who is a non-resident in Poland who has submitted a tax residence certificate.
• 1.3.3. Members of the Management Board and supervisory boards

The remuneration and other benefits obtained by persons on board and supervisory boards shall be among the revenues from the activities carried out in person in question. Under Article 13(7) u.p.d.o.f.

The income of a board member or supervisory board is also free of charge benefits received in connection with the function, such as rented housing or medical insurance. This position was presented by the Director of KIS in an individual interpretation from 10 April 2018 14 .

In case of payment of remuneration for serving as a member of the board of directors and supervisory board by a foreigner subject to a limited tax obligation in Poland (below 183 The company is required to collect flat income tax of 20% (according to Article 29(1) However, remember that Article 29(1) U.p.d.o.f.

shall apply taking into account double taxation agreements. Thus, a derogation from the obligation to collect a tax or the application of a lower tax may take place where, in this regard, the UPO signed with the State in which the service provider is resident.

The company making the payment of remuneration for serving as a foreign person becomes a payer. It is required to collect and pay flat-rate income tax according to Article 41(4) u.p.d.o.f.

If a foreigner submits a residence certificate, refer to Article 16 UPO PL-RFN, according to which the remuneration of members of the supervisory board or board of directors and other similar payments which a person resident in Germany receives due to membership of the supervisory board or board of a company established in Poland may be taxed in Poland.

The salaries, wages and other similar salaries which a person resident in Germany receives for the performance of his duties as a proxy for a company established in Poland may be taxed in Poland.

Use under Article 16 UPO PL-RFN "may be taxed" means that salaries and similar payments will always be taxed in Poland, provided that Polish tax laws provide for their taxation.

Example

Mr. Jan is a resident of Germany. Once a month he comes to Poland for meetings of the supervisory board of Company X, the remaining works are performed remotely in the territory of Germany. As a member of the supervisory board of X, he receives a remuneration of 6,000 PLN gross. For social and health insurance, Mr Jan is covered by contributions in Germany. Company X is obliged to collect a flat-rate income tax of 20%. The remuneration will therefore be calculated as follows:

Gross remuneration: 6,000 PLN.

Flat-rate tax 20%: 1,200 PLN.

Net remuneration: 4,800 PLN.

A comment to the OECD Model Convention indicates what kind of benefits should be covered by the provision on the taxation of the remuneration of persons managing or supervising the company.

Comment to Article 10 OECD Model Convention

The term ‘remunerations and similar payments’ also includes benefits in kind received by a person from a board of directors or supervisory board of a company (for example, employee stock options, use of an apartment, car, medical services, life insurance or club membership).

The payer is obliged to pay a flat-rate tax to the tax office competent for the place of residence and, if the payer is not a natural person, according to the place of establishment or place of business where the payer is not established.

Furthermore, the payer is obliged to submit the following tax year to the tax office of the return by the end of January PIT-8AR, and, if the payer ceases to operate before that date, until the date on which that activity ceases. By the end of January of the following year, the company should make an electronic declaration IFT-1R.

Office competent to send IFT-1R is a tax office competent in matters of taxation of foreign persons. The company is required to transfer to a member of the board or supervisory board from the remuneration for which flat-rate income tax was collected, IFT-R by the end of February of the following calendar year.

Deadline for sending the declaration IFT-1R on request, the taxable person shall expire within the time limit 14 days from the date of the application.

1.3.4. Artists and athletes

Revenues from personal artistic, literary, scientific, coaching, educational and publicist activities, including participation in competitions in the fields of science, culture and art and journalism, as well as revenue from sports, sports scholarships awarded on the basis of separate regulations and the revenues of judges for the conduct of sports competitions constitute revenue from activities performed in person (Article 13(2) The method of taxation of income from the activity performed is dependent on the status of foreigner: whether he is a Polish resident or not. In a situation where a foreigner is a Polish resident, the contracting entity is obliged to make its tax settlement on the same terms as in the case of employment of a Polish citizen.

The tax rate for non-residents is 20% (according to Article 29 U.P.D.o.f.). Article 41(9) u.p.d.o.f. the payer collects 20% flat-rate income tax in question under Article 29 u.p.d.o.f., whether the taxpayer is resident in the territory of Poland within the meaning of Article 3(1a) u.p.d.o.f.

if it obtains a residence certificate from the taxpayer. This principle applies taking into account double taxation agreements to which the Republic of Poland is party.

However, the application of the tax rate resulting from the relevant UPO or the non-payment (non-payment) of the tax in accordance with such a contract is possible on condition that the taxable person’s residence is documented for tax purposes, obtained from him by a residence certificate.

According to Article 17 UPO PL-RFN income of a person obtained from artistic activity, performed personally in Poland, can be taxed in Poland.

If the income relating to the activity of an artist or athlete personally is not attributable to the artist or athlete, but to another person, then such income may be taxed in the country in which the activity of that artist or athlete is carried out.

These rules do not apply to income generated from the activity of an artist or athlete in Poland if the stay in Poland is wholly or mainly paid from public funds one or both Contracting States, a Land, a territorial unit, a local body or a government institution or a public utility organisation.

There is then a tax exemption in the country of origin. Fulfillment of the above condition means the need to apply Articles on the profits of enterprises or professions.

In analysing paid salaries, it should be stressed that there is no detailed definition of universal artistic and sporting activities.

The OECD Model Convention indicates that artists include theatre actors, film and television advertisements, but are not considered artists: speakers, models, cameramen, producers, directors, choreographers, technical staff and accompaniers.

This regulation does not include remuneration derived from sports or artistic activities, such as making the image available. Sports legislation contained in double taxation agreements does not include sports professions, for example massagers, sports doctors, commentators, etc.

Example

The Institute of Art X concluded a contract-order with a German artist to conduct painting workshops in Poland in connection with the organized art festival. Revenue tax in question under Article 13(2) u.p.d.o.f. (e.g.

from a personal artistic activity) obtained by persons residing abroad shall in principle be collected in the form of a lump sum of 20% revenue. The rate of taxation may be modified by the provisions of the relevant double taxation agreement.

According to UPO PL-RFN, the payment of fees directly attributable to the artist is subject to taxation in Poland. As a result, the X Art Institute will be required to collect 20% flat-rate income tax.

The flat-rate tax collected by the payer shall be paid to the account of the tax office responsible for the taxation of foreign persons within the time limit 20. the day of the month following that in which that tax was collected.

Furthermore, by the end of January of the following tax year, the payer is obliged to send a declaration to the tax office responsible for the taxation of foreign persons PIT-8AR, and, if the payer ceases his activity before that date, until the date on which he ceases his activity and send to the taxable person and to the tax office by which the head of the tax office competent in matters of taxation of foreign persons performs his tasks, information IFT-1/ IFT-1R.

The time limit for communication of this information shall expire at the end of January in the case of transfer to the tax office and at the end of February in the case of transfer to the taxable person.

1.3.5. Students

In the field of contract taxation or work with a foreign student, the rules discussed will apply. Under point 3.2. (it is also possible to conclude an employment contract with a student, which is practiced much less often).

For the taxation of student income as part of payment of remuneration in connection with the contract-order or work will apply Article 29 u.p.d.o.f., according to which income generated in Poland by non-residents is charged a flat-rate income tax 20% The stakes.

This principle applies taking into account double taxation agreements to which the Republic of Poland is party.

However, the application of the tax rate resulting from the relevant UPO or the non-payment (non-payment) of the tax in accordance with such a contract is possible on condition that the taxable person’s residence is documented for tax purposes, obtained from him by a residence certificate.

Taxation of student pay regulates Article 21 UPO PL-RFN.

Benefits received for maintenance, education or practice by a student or trainee who resides in a country solely for the purpose of education or practice and is resident In the second the country is free of taxation in the country of temporary residence if those claims originate from sources outside that country.

Consequently, the remuneration of a foreign student practicing in Poland is not subject to taxation in Poland, provided that the funds for the payment come from abroad.

The consequence of the taxation of salaries paid by Polish universities or enterprises to non-resident foreign persons results in the need for the payer to collect 20% advances on income tax until 20. on the day of the following month and, furthermore, to be lodged by the end of January PIT-8AR and IFT-1R. The payer is also obliged to provide information IFT-1R by the end of February of the following year to the foreigner or IFT-1 time 14 the days following the submission of the application.

1.3.6. Professors and research staff

The principle of taxation of persons for teaching at universities or for conducting research and research is defined by points 2.1 and 2.2. These records may be modified by the provisions of double taxation agreements.

For example Article 20 UPO PL-RFN provides that a natural person who resides temporarily In one State (in Poland) for teaching or conducting research work at the university, at a higher school or other recognised educational establishment of that State, and which has, or has, prior to that residence, had permanent residence In the second country (in Germany), subject to tax exemption In the first that country (in Poland) for the remuneration for teaching or conducting research work for a period not exceeding two years from the date of her first arrival for this purpose, provided that it is taxed for such remuneration In the second Contracting State (Germany).

1.3.7. Sailors

In the case of taxation of seafarers, the provisions on a limited and unlimited tax obligation shall apply. The analysis of the way seafarers are accounted for requires the proper application not only of the regulations of u.p.d.o.f., but above all of the double taxation agreements concluded by Poland. Therefore, a number of issues should be highlighted.

According to Article 21(1)(23c) U.p.d.o.f. income tax-free income of seafarers who are nationals of an EU Member State or of an EEA State, obtained from working on ships flying the flag of an EU Member State or an EEA State, used for the carriage of cargo or passengers on international voyages, if it was carried out together in a given tax year for a period of at least 183 days, except for work performed on:

1. tugboats on which less than 50% the working time actually performed by the tugboat during the year was the carriage of cargo or passengers by sea,
2. distillers on which less than 50% the working time actually performed by the dredge during the year was the carriage of the extracted material by sea. According to Article 21(35) u.p.d.o.f. this exemption shall apply subject to the submission to the tax office of a certificate of compliance with the conditions resulting from Article 21(1)(23c) u.p.d.o.f.

The legislator decided that to these 183 days, in addition to the actual time of work at sea, will include, inter alia, the period (based on the documents submitted):

• 1) travel to the place of commencement of work on a ship from its place of residence or any other place indicated in the naval employment contract until the day of commencement of work on the ship,
• 2) travel from the place of termination of work on board until the date of termination of the journey at the place of residence or other place indicated in the Maritime employment contract,
• 3) training or training according to separate provisions,
• 4) leisure, occasional, compensatory leave,
• 5) free of work on land, granted under the relevant provisions.

According to Article 15(4) UPO PL-RFN remuneration received for employed work carried out on board a ship or aircraft operated in international transport or on board a barge in inland navigation may be taxed in the State where the actual management of the undertaking (flag state) is situated.

1.4. Office competent for taxation of non-residents

Tax offices competent for the taxation of non-resident taxpayers are defined by the Minister of Finance in the Regulation on jurisdiction of tax authorities[15]. Under section 5 that Regulation defines the competent authority in each voivodship:

• 1) in the Lower Silesian Voivodeship – Chief of the Tax Office of Wrocław-Psie Pole,
• 2) in the Kuyavian-Pomeranian Province – Warden second Tax Office in Bydgoszcz,
• 3) in the Lublin Warden first Tax Office in Lublin,
• 4) in the Lubuskie Voivodeship – Warden first the Tax Office in Zielona Góra,
• 5) in the Łódź Province – Chief of the Łódź-Śródmieście Tax Office,
• 6) in the Lesser Poland Warden of the Kraków-Śródmieście Tax Office,
• 7) in the Mazovia province – Warden third Tax Office Warsaw -Śródmieście,
• 8) in the Opole Province – Warden first IRS in Opole,
• 9) in the Podkarpackie Province – Warden first Tax Office in Rzeszów,
• 10) in the Podlaskie Province – Warden first IRS in Białystok,
• 11) in the Pomeranian Province – Warden first Tax Office in Gdańsk,
• 12) in the Silesian Voivodeship – Warden first Tax Office in Katowice,
• 13) Świętokrzyski – Warden second IRS in Kielce,
• 14) in Warmia-Masurian Province – Chief of the Tax Office in Olsztyn,
• 15) in the Wielkopolska Province – Chief of the Tax Office of Poznań-New Town,
• 16) in the West Pomeranian Province – Warden third Tax Office in Szczecin.
• 1.5. PIT-11 for a foreigner

Entities employing foreigners under civil law contracts, where they are considered resident because of having a life centre in Poland or being in the territory of Poland in a given tax year above 183 days, they are obliged to settle in terms of calculation, payment and declaration of tax in accordance with u.p.d.o.f. on a similar basis as in the case of contracts concluded with Polish citizens.

If the taxpayer has a life centre abroad and does not provide a residence certificate, then at a time when his stay in Poland did not exceed 183 days in the tax year, is considered not to have a place of residence in Poland. In a situation where his stay exceeded 183 days in the tax year, it must be stated that he is a person residing in Poland.

Employment of foreigner under employment contract from first the date of the legal relationship is settled as with the resident, regardless of the location of his life centre or the number of days spent in the territory of Poland. In both cases, the resident foreigner shall be required to issue and transmit to him within the applicable time limit. PIT-11. In the absence of a PESEL number, the foreigner must indicate in the PIT declaration as the taxpayer's identifier: 9999999999.

1. 6. The possibility of tax settlement by a foreigner in a tax return filed in Poland

Foreign persons to whom flat-rate income tax has been deducted are not obliged to submit annual annual accounts in Poland. Based on the information provided IFT-1R/IFT-1 they shall settle in the country where they have the centre of interest in life. Foreigners based Article 29(4)(5) u.p.d.o.f.

is entitled to use the settlement of revenues achieved in Poland according to the tax scale. In this case, the flat-rate income tax collected from these revenues shall be treated on an equal footing with the income tax advance collected by the payer.

Non-residents who:

• 1) are resident for tax purposes in an EU Member State other than the Republic of Poland or in another EEA State or in the Swiss Confederation, and
• 2) document the residence certificate for tax purposes, and

1. there is a legal basis resulting from UPO or other ratified international agreements to which the Polish Party is party for obtaining tax information from the tax authority of the State in which the taxpayer is resident for tax purposes. In the case of UPO PL-RFN, this basis is defined Article 27.
2. Explanations for the formula

According to the comment to the OECD Model Convention, the calculation of the length of stay in a given country is done by applying a method based on ‘days of physical presence’. They shall not include the days on which the taxable person was abroad.

The days of your stay abroad include the day of your departure from Poland and arrival in the country, as well as Saturdays and Sundays, national holidays, holidays before, during and after the end of your business, short breaks (training, strikes, closure of the company, delivery delay), sick days (except for events preventing you from leaving the person who could, in a given case, obtain tax exemption) and days taken due to death in the family or illness in the family.

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10 reference no. 0114-KDIP3-3.4011.231.2019.1.JK2, Legalis.

14 reference no. 0113-KDIPT2-3.4011.114.2018.1.PR, Legalis.

Legal basis

1. Article 3(1)(4a)(5a)(21)(11a)(13)(2)(7)(8), Article 21(1)(23c), Article 21(35)(29)(31)(32)(41)(42) u.p.d.o.f.,
2. Article 14(15)(16)(17)(20)(21)(27) UPO PL-RFN.

The article comes from the book C.H. Beck "Bookkeeping and Tax Instructions" under ed. prof. nadzw. dr. hab. Artur Hołda, plus CD, ed. 2, 2020, https://www.ksiegarnia.beck.pl/19340-instrukcje-ksiegowe-i-podatkowe-artur-holda