An important criterion for the determination of the place of taxation of an income of the person performing the work abroad is the place of residence of that person.
According to article 3 paragraph 1 of the PIT Act, individuals being residents of Poland are subject to pay tax on all their revenues regardless of the source of an income (unlimited tax-paying liability). In the paragraph 1a of that article, the person being the resident of the territory of Poland (so-called tax resident) is considered to be one when:
– has here a personal or economic interests center (center of vital interests) or,
– is staying here longer than 183 days in a fiscal year.
Country of the personal and economic interests must be understood as a country with which the employee has closer personal and economic relations. In practice, this is a country where a person has always lived and worked, also where the family of that person lives, and where he has his assets. As a general rule, according to the polish provisions, income of a polish tax resident is taxed in Poland.
It should be noted that important are the agreements between the countries. Mostly, however, the country where the employee works, is interested in taxation of the revenue from such work. In that situation the rules governing the avoidance of double taxation apply. Generally it is described by a situation, when a Polish tax resident, formally employed by the company established in Poland, carries out his work in another country, still being a Polish tax resident.