The prospect of living in Poland while paying taxes only in one’s home country seems appealing to many foreigners – from digital nomads to retirees. But does Polish law allow for such a scenario? Can one legally reside in Poland for an extended period without being subject to the Polish tax system? The answer lies in the concept of tax residency.

Introduction: living in Poland, paying Taxes elsewhere – dream or reality?

In the era of globalization and remote work, more people are considering optimizing their tax burdens by choosing their place of residence. Poland, attractive in many aspects, often features in these considerations. However, it’s crucial to remember that tax laws are precise and based on objective criteria, not just the place of work or source of income. Mere physical presence in Poland can trigger obligations towards the Polish tax authorities.

The Key to taxes in Poland: tax resident status

The fundamental issue determining the scope of tax obligations in Poland is whether a person holds the status of a Polish tax resident. This status decides whether you will pay Personal Income Tax (PIT) only on income earned in Poland or on your entire worldwide income.

When do you become a polish tax resident? Two criteria

According to the Polish Personal Income Tax Act, an individual resident in the territory of Poland (i.e., a Polish tax resident) is a natural person who meets at least one of the following conditions:

Centre of Vital Interests (Personal or Economic)

• Possesses a so-called centre of vital interests in Poland. This means having closer personal ties (e.g., spouse, minor children reside here, family home) OR economic ties (e.g., main place of gainful activity, investments, loans taken) with Poland than with any other country. The assessment is individual and based on the overall life situation.

The 183-Day Rule of Stay in a Tax Year

• Stays in the territory of Poland for more than 183 days in a given tax year (which aligns with the calendar year in Poland). All days of physical presence count, regardless of the purpose of stay.

Meeting either one of these conditions makes you a Polish tax resident under Polish law.

Resident vs. non-resident: scope of tax liability

• Polish Tax Resident: Subject to unlimited tax liability in Poland. This means they must report all their income in Poland, regardless of where it was earned (so-called worldwide income). Potential double taxation is eliminated or limited by international treaties.
• Tax Non-Resident: Subject to limited tax liability in Poland. This means they pay Polish PIT only on income earned in the territory of Poland.

So… Can you live in Poland and NOT pay taxes here?

The answer is: it’s very difficult and possible only in strictly defined situations.

• YES, if you are a non-resident with no Polish income: If you stay in Poland for less than 183 days a year AND your centre of vital interests remains abroad, you are a non-resident. If you also earn no income from Polish sources (e.g., don’t work for a Polish company, don’t rent out property here), then you might indeed have no Polish PIT liability.
• Generally NO, if you are a resident: If you stay in Poland for more than 183 days a year OR you have moved your centre of vital interests here, you become a Polish tax resident. You are then subject to taxation on your entire worldwide income, even if you work remotely for a foreign company and receive payment abroad.

The role of Double Taxation Treaties (DTTs)

Poland has signed Double Taxation Treaties with many countries. What do they change?

• They don’t eliminate tax liability for residents: If you are a Polish tax resident, you still must declare your worldwide income in Poland.
• They determine where specific income is taxed: DTTs indicate which country has the primary right to tax particular types of income (e.g., employment income, business profits, dividends).
• They prevent double taxation: They introduce methods to avoid taxing the same income twice (either the exemption method or the credit method).
• They resolve residency conflicts: If you are considered a tax resident by both countries under their domestic laws, DTTs contain “tie-breaker rules” to determine tax residency for treaty purposes (based on factors like permanent home, centre of vital interests, habitual abode, citizenship).

Important: Even if a treaty determines your tax residency is in another country, you might still have limited tax liability in Poland on income earned in Poland.

Example scenarios (nomad, student, posted worker)

• Digital Nomad: Works remotely from Poland for a US company, stays for 8 months. Becomes a Polish tax resident (>183 days). Must report US income in Poland, applying the avoidance of double taxation method from the Poland-USA DTT.
• Student: Studies in Poland for 10 months, but family and main financial support are abroad. Despite exceeding 183 days, their centre of vital interests might remain abroad – they could potentially remain a non-resident (requires individual assessment). Income from any part-time work in Poland would be taxed here.
• Posted Worker: Depends on the DTT and details of the posting. May sometimes remain a resident of the sending country under specific treaty conditions.

Mark’s story: encountering polish tax residency

Mark, a freelancer from Canada, moved to Poland in March, planning to stay for about a year. He was convinced that since he only worked for Canadian clients and had his bank account there, he only paid taxes in Canada. After a consultation, he learned that by exceeding 183 days of stay in Poland within the year, he became a Polish tax resident. This meant he had to file an annual PIT return in Poland, reporting all his income. The Poland-Canada DTT allowed him to credit the tax paid in Canada, but it didn’t exempt him from the obligation to file and calculate tax in Poland.

Summary: Tax residency is a fact, not a choice

Tax resident status in Poland arises from objective criteria – length of stay or location of the centre of vital interests. It cannot be freely chosen. If you meet either criterion, you must anticipate the obligation to report your worldwide income in Poland, while also remembering the protection offered by double taxation treaties.

Unsure about your tax residency status? Wondering how to apply a double taxation treaty? Need help with tax filing as a foreigner in Poland? Get a consultation! We offer professional tax advisory services for foreigners.