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Foreign employers in Poland as income tax payers

by Anita Tulak

Foreign employers hiring employees in Poland face the challenge of correctly calculating salaries while complying with applicable tax and social security regulations. This process is further complicated by inconsistent interpretations of tax provisions presented by tax authorities, leading to discrepancies in legal interpretations and increasing the risk of errors in settlements. Workplaces based outside Poland that do not meet the definition of a permanent establishment for tax purposes, but which employ workers within its territory, encounter a dilemma regarding their role as a tax withholding agent.

The role of an income tax remitter on salaries

According to the provisions of Polish tax law, the obligation to act as a withholding agent for personal income tax (PIT) rests with the employer hiring employees under an employment relationship. The core issue of doubts and inconsistencies in the interpretation of tax law concerns the term “employer”. 

According to Article 31 of Poland’s Personal Income Tax Act: “Employers that are individuals, legal persons, and organisational units without legal personality are obliged, as withholding agents, to calculate and collect advance payments on personal income tax throughout the year from individuals who receive income from these employers under a service relationship or employment relationship."

The Act does not contain any provision requiring an entity to have a registered office in Poland to be classified as an employer. This position is further presented by the Second Tax Office in Warsaw-Śródmieście, which is responsible for taxpayers and withholding agents that do not have a registered office in Poland. 

This view is also supported by the courts – for example, in the justification of the judgment of the Provincial Administrative Court (WSA) in Gliwice on 02 December 2021 (Case no. I SA/Gl 1243/21): “An employer may also be an entity based abroad, provided that it pays income from an employment relationship arising in Poland”.

However, the established case law of the National Revenue Information System – Krajowa Informacja Skarbowa (KIS), which issues individual tax interpretations, presents a contradictory position to the court rulings and tax offices. KIS argues that a foreign employer that does not meet the definition of a permanent establishment under Poland's double taxation treaties cannot act as a withholding agent for salaries. This position is based on the literal wording of Article 38 of the Personal Income Tax Act, where the argument is justified by the impossibility of determining the appropriate local tax office for an entity that does not have a registered office in Poland.

Foreign entrepreneurs without a permanent establishment in Poland

According to the position of the National Tax Information, in a situation where a foreign entity does not have a tax establishment, the obligation to remit income tax is transferred to the employee. In such a case, pursuant to Article 44 of the Personal Income Tax Act, the employee must independently calculate and pay advance income tax payments by the 20th day of the month following the month in which the income was received, and the employee must submit the annual PIT-36 tax return by the end of April of the following tax year. 

Under these circumstances, this could be considered a convenient solution for an entrepreneur unfamiliar with the Polish tax system. However, this solution is no longer adequate in practice. Entrepreneurs want to maintain control over their tax obligations and minimise the risk of abuse resulting from shifting responsibility to employees. From this perspective, the shortcomings of Polish tax regulations and their failure to adapt to the current international business environment should be acknowledged. 

As a result, employers often choose to voluntarily register as a payroll tax remitter. To do this correctly, we recommend submitting a general letter to the tax authority, presenting the reason, and requesting registration. Along with this letter, the NIP-2 declaration must be submitted. Subsequently, a statement regarding the person responsible for making payroll tax payments must be filed. These actions aim to safeguard the taxpayer’s interests against existing interpretational discrepancies.



Anita Tulak is a graduate of the Faculty of Law and Administration and a tax advisor at the National Chamber of Tax Advisors. She has passed through all levels of career in accounting and tax law, from assistant to partner of a law firm and worked for recognised private consulting firms and the “Big Four” company PwC.


01 April 2025

Anita Tulak

NTAX, Lawyer, Tax Advisor, Partner

NTAX