As per the so-called a principle of residence, those who reside for tax purposes in Poland (so-called residents) shall have an unlimited tax liability, i.e., they shall tax all income both in Poland and abroad.
A person residing in Poland shall be deemed a natural person who:
- has a centre of either personal or economic interest (centre of vital interests) within the territory of Poland or
- stays on Polish territory for more than 183 days within a tax year.
This means that if you have a registered office or management board on Polish territory, or you stay here longer than 183 days a year, you are subject to the tax obligation in Poland on all your income, regardless of where it has been earned.
On the other hand, those who do not reside for tax purposes in Poland (so-called non-residents) shall have a limited tax liability.
Should you do business both in Poland and in another country, this problem shall be governed by double taxation avoidance conventions that specify in which cases and where to pay taxes.
- in a situation where - in accordance with double taxation avoidance conventions - income is taxable in both countries, the double taxation method specified in that convention shall apply
- should a convention with a given country not be agreed, the method of avoiding double taxation shall be regulated by the Personal Income Tax Act
- double taxation convention shall prevail over national law.
Double taxation avoidance conventions may lay down different methods depending on the countries that have concluded a convention. Before you settle taxes, make sure you know whether or not your country has a convention signed with Poland.
Important note! The general principle on the avoidance of double taxation states that profits of an enterprise of a Contracting State shall be taxable solely in that State unless an enterprise conducts business in the other Contracting State through an establishment situated therein (e.g., a trade office). So, if you do not have an establishment in another country, you shall pay foreign income taxes in Poland.