January is a crucial time for every employer, as it is time to fulfil tax obligations towards the Tax Office. For Polish employees the process is standard – employers give them the PIT-11 form. However, when hiring foreign workers, the situation requires additional attention.
Understanding the status of a foreigner’s tax residence is crucial and is a first step in the correct tax process. This status defines in which country the income tax should be first paid.
Foreigner employed for employment contract
If the foreigner is employed on the basis of a contract of employment, regardless of the tax residence in each case he should be accounted for on a general basis and at the end of the year issued PIT-11.
Foreigner employed under contract
If the foreigner (non-tax resident) has worked for a maximum of 183 days, a flat income tax should be paid and IFT-1R issued at the end of the year.
The work of the foreigner from 184 days should be settled on general rules (an advance on tax) and for this period issue PIT-11.
IMPORTANT: If a foreigner is a tax resident, he should always be accounted for on general terms and issued PIT-11.
To which tax office would you send a foreigner’s declarations?
The choice of an appropriate tax office for the foreigner’s tax return depends on his residence status. For those who do not have the status of a resident of Poland, the tax return should be sent to a specialised tax office, which deals with the taxation of foreigners. In that case, the declaration shall state the foreign address of the taxable person.
In turn foreigners who are Polish tax residents should make a declaration to the tax office competent for their place of residence in Poland. If the foreigner no longer lives in Poland, indicate his current foreign address in the declaration. Regardless of the change of address, the competent tax office remains the same.
Can a foreigner benefit from a tax credit?
Foreigners who make tax returns in Poland can benefit from tax reliefs and deductions – regardless of their resident status. But under certain conditions!
For example, people who are not tax residents in Poland have the right to an online relief or family relief, subject to the submission of an annual PIT-36 or PIT-37 declaration in Poland.
In turn, both Polish tax residents and residents of other Member States of the European Union or of the European Economic Area may deduct social and health contributions that are paid in Poland as well as in the EU and the EEA. The conditions for the use of such deductions are strictly defined by the tax rules in force.