The employee and the employer have both tax and social and health insurance obligations. The interests of the taxpayer and the remitter may be safeguarded by an interpretation issued by a competent authority in an individual case.
The eleventh of the publications in series “12 Rules of the Cross-Border Secondment of Employees” presents the benefits of cooperation with tax advisors in the scope of seconding employees abroad. 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.
Doubts and difficulties regarding cross-border posting of workers
Presenting the cycle of 12 rules of the cross-border seconding of employees, we focused on presenting the most important issues and possible problems related to the subject of seconding of employees to perform work on the territory of another country. Difficulties may arise on both parts of the employment contract –the employer and the employee.
In the individual articles we highlighted the possible difficulties such as:
- identifying a situation in which there is a secondment of an employee;
- determination of tax liability;
- establishing tax residence;
- establishing relevant legislation for social security purposes;
- compliance with all regulations of other countries and international regulations
- fulfilling the obligations of the employer as a payer;
- submission of the employee’s annual return in Poland.
In addition to tax obligations, employees are also subject to social security and health insurance obligations. In order for the employee and the employer to fulfil these obligations correctly, it is necessary to determine the applicable legislation and, in many cases, to obtain a document confirming the application of the legislation involved.
Important
It may also be helpful to obtain an individual interpretation that will confirm the correctness of the approach to tax settlements of the delegated employee. In the case of persons delegated to Poland by a foreign entity, support may be necessary both in the registration process to the relevant authorities and in the monthly calculation and payment of advance payments for income tax and social security and health insurance contributions. Elements regarding determining the employee’s remuneration and settlement rules are also important.
Support of specialized entities
In order to fulfill tax and insurance obligations the support of qualifies specialists is worth to consider, in this matter – tax advisor.
The services of tax advisor in fulfilling the obligations related to the secondment to another country may be helpful for both – the employer as for the employee. It should be noted that the law regulations of many countries differ with regard to the responsibilities of the both parties of the secondment contract. The support of professionals can avoid sanctions for failing to meet these obligations.
Summary
The multitude of legal acts and the diversity of regulations in force in different countries may make it difficult to properly perform the obligations related to the posting of workers. Therefore, it is worth considering the support of external entities, such as tax advisors, to ensure compliance with regulations and avoid potential sanctions. The support of specialists may prove invaluable in the correct settlement of taxes and insurance, which is crucial for both the employer and the employee.
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
