Working and living in Poland as a foreigner involves not only legalizing stay and work but also specific tax obligations. A key concept that determines the scope of these obligations is tax resident status. Are you a tax resident of Poland? What does it actually mean, and what are the consequences for your settlements with the Polish tax office?

Tax resident vs. non-resident – The key tax difference

Polish tax regulations (the Personal Income Tax Act – PIT Act) distinguish between two main categories of taxpayers based on the scope of their tax liability:

  1. Tax Residents (Unlimited tax liability): Individuals considered Polish tax residents are subject to taxation in Poland on their entire worldwide income, regardless of where it was earned. This means they must declare and settle in Poland both income earned domestically and income obtained abroad (taking into account double taxation treaties, of course).
  2. Non-Residents (Limited tax liability): Individuals who are not Polish tax residents pay tax in Poland only on income earned within the territory of Poland (e.g., from work performed in Poland, from real estate located in Poland).

Determining your residency status is therefore absolutely crucial for defining the scope of your tax obligations in Poland.

How to determine if you are a polish tax resident? (Criteria)

According to Art. 3 of the PIT Act, a natural person is considered to have a place of residence in the territory of the Republic of Poland (i.e., to be a Polish tax resident) if they:

  1. Have their center of personal or economic interests (center of vital interests) in the territory of Poland.
    • Center of personal interests: Understood as the place with which you have stronger personal ties, e.g., where your immediate family (spouse, children) resides, where your home is, where you participate in social, cultural life, etc.
    • Center of economic interests: The place with which you have stronger economic ties, e.g., where you perform your main gainful activity (permanent job), run a business, have investments, property.
    • Important: It is sufficient for the center of your personal OR economic interests to be located in Poland to meet this criterion.
  2. Stay in the territory of Poland for more than 183 days in a tax year.
    • This refers to the sum of days of physical presence in Poland within a given calendar year (the tax year in Poland coincides with the calendar year).
    • The stay does not have to be continuous. All days of presence are counted.

Crucial: To be considered a Polish tax resident, it is sufficient to meet just one of the above conditions (center of vital interests OR stay > 183 days). If you meet at least one of them, as a rule, you are subject to unlimited tax liability in Poland for that year.

Consequences of being a polish tax resident

Having Polish tax resident status primarily means:

  • Taxation of Worldwide Income: As mentioned, you must declare and settle in Poland all your income, both earned in Poland and abroad.
  • Need to Apply Double Taxation Treaties (DTTs): If you also earned income in another country with which Poland has signed a double taxation treaty (which Poland has with most countries), you must apply the relevant provisions of that treaty and Polish law. These treaties determine which state has the right to tax a specific type of income and which method of avoiding double taxation should be applied in Poland. The two main methods are:
    • Exemption with progression method: Foreign income is exempt from tax in Poland, but it is taken into account when calculating the tax rate for Polish income.
    • Proportional credit method: Tax paid abroad is deducted from the Polish tax calculated on total income (Polish and foreign) (up to a certain limit).
  • Obligation to File Annual PIT Return: As a resident, you must file an annual tax return in Poland (usually PIT-36 if you had foreign income or business activity, or PIT-37 if only Polish income via payers). The PIT/ZG attachment is used to report foreign income. The deadline for filing is usually April 30th of the year following the tax year.
  • Right to Use Tax Reliefs: As a resident, you can benefit from most tax reliefs and deductions available in the Polish tax system on the same terms as Polish citizens (e.g., joint settlement with a resident spouse, child relief, IKZE contributions, rehabilitation relief, donation deductions, etc.), provided you meet the other conditions for the specific relief.

Certificate of tax residence (CFR-1)

  • What it is: An official document issued by the Polish Tax Office upon your request (form CFR-1), which confirms that you are a Polish tax resident for a given period.
  • Why it’s needed: It is very useful (and sometimes necessary) to present to foreign tax authorities (e.g., in your home country or where you earned foreign income) to apply the provisions of relevant DTTs and avoid double taxation abroad.

Scenario: foreigner working in Poland for over half a year

Sarah, a Canadian citizen, came to Poland in March 2024 for a one-year employment contract. She lives in a rented apartment; her family initially remained in Canada.

  1. In 2024, Sarah stayed in Poland for more than 183 days.
  2. Therefore, based on the length of stay criterion, she became a Polish tax resident for the year 2024.
  3. Consequences: When filing her PIT return for 2024 (by April 30, 2025), Sarah must declare in Poland all her income earned in 2024 – both her salary from the Polish employment contract and any potential Canadian income earned after becoming a Polish resident (if any).
  4. She needs to check the Poland-Canada DTT to correctly account for any Canadian income (likely using the proportional credit method) and file the PIT-36 return with the PIT/ZG attachment.
  5. As a resident, she can potentially use Polish tax reliefs if she meets the conditions.
  6. She might also need a Polish Certificate of Tax Residence (CFR-1) to present to the Canadian tax authorities.

How to determine your status and settle taxes?

Determining tax residency, especially based on the “center of vital interests,” and correctly applying double taxation treaties can be complicated. What can you do?

  • Use official resources: The podatki.gov.pl portal and the National Tax Information (Krajowa Informacja Skarbowa – KIS) helpline offer many explanations.
  • Consult a tax advisor (doradca podatkowy): This is the best solution in case of doubt. A licensed tax advisor specializing in international taxation or taxation of foreigners will precisely determine your status and help you correctly fill out the tax return.
  • Seek legal advice: If your residency status depends on complex legal aspects of your stay (e.g., type of permit, family situation), a law firm can help analyze these aspects in the context of residency criteria and direct you to appropriate tax advisors.

Tax resident status in Poland means the obligation to settle your worldwide income in our country, considering international tax agreements. Correctly determining this status and diligently fulfilling reporting obligations will help avoid problems with the tax office.

(Please remember that the information contained in the article is general in nature. Tax laws are complex and may change. Each situation requires individual analysis. Always consult a licensed tax advisor or use official sources of information.)

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