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 Poland and from Poland. 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.
The PIT-11 information provides data to calculate the amount of tax obligation in Poland.
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.
Thus, after the end of the tax year, seconded employees are obliged to independently indicate income that is taxable in Poland in their annual tax return. In their case, there will be no PIT-11 information, as the foreign entity is not obliged to prepare it.
In summary, in the case of cross-border secondments, there will most often be an obligation to file two annual tax returns – one in the country of tax residence and one in the country of secondment. For this reason, it is important to prepare both tax returns correctly so that they correlate with each other. Workers, who perform work on the territory of Poland, while their employer is located abroad, will not receive PIT-11 information from their employer, which is the basis for the preparation of the annual tax return.
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