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Polish Tax Residency

When do I have to settle the tax in Poland?

 

The tax residence criterion enables to determine in which country and from which revenues the tax is payable. In case of persons residing throughout the tax year in one country and generating income only from sources in this country, there is no doubt as to the country of residence.

 

In the case of persons temporarily residing abroad, working abroad or having property there, often doubt arises in which country the income tax should be settled.

For the purpose of the correct settlement of the tax one can apply to the tax authorities of the country of residence for the issuance of the residence certificate. This is the document which states the seat of a taxpayer for tax purposes.

 

Unlimited tax liability rests with the natural persons residing in the territory of the Republic of Poland. These are persons who have in Poland the centre of personal or economic interests or reside in the country for more than 183 days in the tax year. Such persons are subject to tax in Poland on their entire income (revenues), irrespective of the location of the sources of their income (Article 3(1) PIT).

Limited tax liability applies to the individuals who do not fulfil the above mentioned criteria, they are subject to tax in Poland only on income (revenues) obtained in the territory of Poland (Article 3(2) PIT).

 

So the main factor determining the tax residency in Poland is the length of stay – 183 days in the tax year or having a center of personal or economic interests (center of vital interests) in Poland. This means that a person who meets these conditions should account for the Polish tax authorities of all his income, not only Polish income but also worldwide income taking into account agreements on avoidance of double taxation.

 

Surely it is better to submit an annual statement correction showing the revenues not previously reported and to pay the Polish tax before the tax office comes to us with the formal control. Under certain conditions, one can avoid the severe penalties resulting from the Polish Criminal Code and pay less than the statutory interest for late payment.

 

Source: Polish Ministry of Finances web site