Taxes

Taxation activity in Poland

Tax residence

According to the so-called residence principle, persons who have their place of residence for tax purposes in Poland (the so-called residents) have an unlimited tax obligation, i.e. they tax in Poland all income earned both in Poland and abroad.

A natural person is considered to be a resident of Poland if he or she:

  • has a centre of personal or business interests (centre of life interests) on the territory of Poland, or
  • stays on the territory of Poland longer than 183 days in a tax year.

This means that if you have your registered office or management board in Poland, or if you stay longer than 183 days a year, you are subject to taxation in Poland on all your income, regardless of where it is earned.

On the other hand, persons who do not have a place of residence for tax purposes in Poland (so-called non-residents) have a limited obligation.

If you do business in Poland and another country, double taxation conventions that specify when and where taxes should be paid regulate the problem.

  • where, under double taxation conventions, income is taxed in both countries, the method of avoiding double taxation laid down in the double taxation convention is applied
  • if no agreement has been concluded with the country, the avoidance of double taxation is regulated by the Personal Income Tax Act
  • double taxation conventions take precedence over national law.

DTCs may establish different methods, depending on the countries that have concluded them. Before you settle taxes, it is necessary to check whether your country has signed an agreement with Poland.

Important! The general rule on the avoidance of double taxation is that the profits of a company of a Contracting State are taxed only in that State, unless the company carries out its economic activity in the other Contracting State through a permanent establishment situated there (e.g. a commercial office). So if you do not have an establishment in another country, you pay taxes on foreign income in Poland.

Social insurance in Poland

In the case of social security, there is a basic principle, namely that at any given time you can be covered by social security only in one country. Thus, even if the activity is carried out in several Member States at the same time, the insurance is provided by only one Member State and all social security contributions have to be paid for there.

In terms of local jurisdiction, this should be:

  • the country where you live, if you do a substantial part of your work there
  • the country where the centre of interest for your business is located – if you do not live in a country where you do a substantial part of your work.

In order to determine whether a substantial part of the activity is pursued in a given country, account shall be taken of turnover, working time, number of services provided or income. The document stating where the contributions are to be paid is form A1. The specimen A1 form is identical throughout the European Union, on the basis of which contributions are paid in a given EU country and the exemption from the obligation to pay such contributions in another country is also obtained.

If you provide cross-border services in Poland, you do not need to register with the Polish social security system. You should only apply to the insurance institution in your country of residence, which is competent for your address, for a certificate of social security cover (on form A1). The certificate obtained should be used, for example, in the event of an audit.

If you are insured in Poland (according to the rules applicable to Polish entrepreneurs), all matters related to insurance are handled in the Social Insurance Institution.

Important contacts

  • If you have any questions about registering your business with CEIDG, call 801 055 088 or 22 765 67 32
  • If you wish to obtain more information about the online registration of limited liability companies and partnerships, please contact s24@gdansk.sa.gov.pl or call (71) 748 96 00. After dialing the telephone number, select 4 (Electronic access to registry courts).
  • If you have any questions about insurance, contact the Social Insurance Institution’s Call Centre on 22 560 16 00 (the cost of a call according to the customer’s agreement with the telecommunications operator), and

  • If you have any doubts about the payment of taxes in Poland, please contact the National Tax Information on the following telephone numbers:

  • The biznes.gov.pl Help Center is at your disposal as well.

source: https://www.biznes.gov.pl/en/firma/doing-business-in-poland/company-registration-in-poland/rules-of-conducting-economic-activity-in-poland-by-foreigners

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