Polish tax residency – who is taxpayer in Poland?
Determining the status of a taxpayer in Poland is important for correct accounting with the Tax Office. As services are increasingly digitised and the home office work model becomes more common, it becomes more important to know when individuals and companies are recognized as Polish tax residents.
What does it mean to be a tax resident in Poland? It means being subject to unlimited tax liability in Poland, i.e., having to settle all your income in this country. Persons who are not Polish tax residents are subject to tax obligation only up to the amount of income earned in the territory of the Republic of Poland.
For a natural person to be recognised as a Polish tax resident, one of the following conditions must be met:
- Stay in the territory of the Republic of Poland for more than 183 days in a tax year, or
- Have a centre of personal or economic interests in the territory of the Republic of Poland (so-called centre of interests).
The term “centre of interests” is not precise and its meaning has been interpretated by the courts on numerous occasions. It is generally accepted, in accordance with the norms of international double tax treaties, that the centre of interests is the country with which a person is more connected through family and social ties, employment, political, cultural and any other activity, the place of performing paid activity, sources of income, investments, real and movable property, or the place from which the person manages his property, etc.
In the case of companies, the matter is somewhat simpler. A company with Polish tax residency is a company which:
- Has its registered office in Poland; the registered office is specified in the articles of association and disclosed in the register of entrepreneurs of the National Court Register
or
- Has the place of actual management in Poland. According to the Supreme Administrative Court, such a place is the one where the actual management of the company takes place, decisions are made on key issues for the company, and thus, are significant for the company both from the economic and functional point of view.
The correct determination of the centre of interests or actual management may therefore be problematic and ambiguous and may often be the subject of a dispute with the Tax Office.
Przemysław Antas