The Polish employer has obligation to prepare PIT-11 information also for a non-tax resident. The employee is responsible for submitting annual tax return PIT-36 or PIT-37. The foreign employee, seconded to work in Poland, is obliged to settle and pay the tax on his/her own.
In the ninth of the publications in series “12 Rules of the Cross-Border Secondment of Employees” we focus on the obligation to submit annual tax returns. In this series we will present the most important issues related to the process of seconding employees to another country. Each publication will present an individual issue in details. The entire series of articles will be a compendium of general knowledge on the cross-border seconding of employees.
Annual tax return in Poland
As a rule, in the Polish tax system, the obligation to correctly calculate, collect and pay tax rests with the remitter.
In addition to the above, the remitter is also obliged to prepare and provide the employee and the tax office with PIT-11 information, which is information on income and advances collected for income tax.
However, the taxpayer is responsible for filing an annual tax return on the correct form and paying the tax due, if applicable.
In the case of an employee who is not a Polish tax resident, the Polish employer is obliged to issue the PIT-11 information including those incomes earned for work performed on the territory of Poland. Then, the information provided to the office and to the employee should indicate the taxpayer’s current address and residence status.
In order to avoid a situation in which an employee’s remuneration will be lower due to the higher level of taxation in the host country (compared to the tax burden that would be imposed in Poland), employers often provide seconded employees with a tax equalization method. We have covered this topic in our subsequent articles.
Important
The PIT-11 information provides data to calculate the amount of tax obligation in Poland.
Tax return abroad
Employees subject to limited tax liability in Poland are obliged to tax the income obtained for work abroad in the posting country. Therefore, their settlement obligations on all worldwide income result from the national law of the country of posting. In such a case, the employee will have to submit two tax returns – one in Poland and the other in the country of tax residence. In turn, employees who are Polish tax residents and were delegated by their Polish employer to work abroad must determine whether, under the regulations in force in the country to which they were delegated, they are not obliged to submit an annual declaration of their income to the local tax authorities.
Non-residents without a tax remitter in Poland
When an employee earns income on the territory of Poland, but his or her employer is located abroad, then all the tax calculation obligations are imposed on the employee. Due to difficulties such as, inter alia, the language or the lack of knowledge of the applicable tax law in Poland, these persons must, in the majority of cases, use the assistance of specialized companies in this respect.
Therefore, after the end of the tax year, delegated employees are obliged to independently report in their annual tax return the income that is subject to taxation in Poland. In their case, there will be no PIT-11 information because the foreign entity is not obliged to prepare it. They should submit an annual tax return based on the income obtained during the year, on which they paid monthly income tax advances.
Summary
In the case of cross-border posting of workers, there is usually an obligation to submit two annual tax returns – one in the country of tax residence and the other in the country of posting. It is important to prepare both tax returns correctly so that they are consistent. It is worth using the help of specialized tax advisors for this purpose.
Co-author: Karolina Nieścior, Tax advisory services
The series of “12 Rules of the Cross-Border Secondment of Employees” consists of the following articles:
- Cross-border secondment of employees
- Secondment and delegation
- Employee seconded to work in Poland
- Employee abroad – taxes in Poland
- Secondment – social and health insurance
- Secondment – documentation
- Secondment – double taxation agreements
- Secondment – income taxation in different countries
- Secondment – annual tax return
- Cross-border secondment of workers Directive
- Secondment – tax advisor assistance
- Secondment – additional questions
