Virtually every taxpayer who earns income subject to Polish taxation is required to file an annual tax return. Even if it is only income from an employment contract received from a Polish employer, the taxpayer is still required to file an annual tax return.

The regulations provide for more than a dozen different tax return forms, specific to certain types of income and forms of taxation, as well as available tax credits and deductions to which the taxpayer is entitled. The forms are often unintuitive, complex and require knowledge of the Polish language, as they are available and must be filed only in this language.

Expatriates often have income sourced outside of Poland and subject to foreign taxation. If an expatriate has become a tax resident of Poland, they are obliged to reconcile such income in their Polish annual tax return and apply the relevant provisions of the applicable double tax treaty to avoid double taxation.

Even if the process of an individual annual tax filing is to some extent supported through a dedicated  official online platform, the taxpayers in Poland bear responsibility for the timing and correctness of their tax returns, as well as for payment of any tax in excess of any amounts of tax paid or withheld during the tax year. The deadline for filing annual tax returns is fixed – 30 April of the year following the tax year. No extensions are available.

Expatriates who pay taxes in Poland, especially in the first years of their stay here, usually need assistance in preparing their annual tax returns.

How we do it

The process starts two or three months prior to the deadline for filing taxes. The first step is an interview during which we gather the information necessary to understand the expatriate’s personal and economic situation and assess their tax residency.

During the interview we discuss:

  • the income earned during the tax year by the taxpayer, their spouse or minor children, with particular interest on income sourced outside of Poland;
  • data, documents and figures that need to be delivered by the expatriate, so we could calculate their Polish tax liability;
  • their entitlement to use tax breaks or allowances, and the documents that support it;
  • the technical aspects of paying the tax liability that may result from the annual tax return (as it needs to be made to a dedicated individual tax account of the expatriate);
  • the mechanism of tax refunds (in case the expatriate is entitled to receive any).

Once we have all the necessary data, documents and figures, we prepare the calculation of the expatriate’s annual Polish tax liability and send it to them for acceptance. At this stage, if required, we explain the rules of taxation of certain types of income, or the calculations made to ensure that the methodology and outcome is properly understood.

After the calculation is accepted, we prepare a final set of tax declarations that is submitted to the tax authorities by the expatriate themselves, or by us if we act as their proxy.

Payment of tax liability

We prepare payment instructions to facilitate bank transfers to cover tax liabilities resulting from annual tax returns. The instructions include all the information that needs to be provided to the bank to make sure that the payment is properly booked by the tax authorities and offset against the expatriate’s tax liability.

If the tax return includes various types of income that require filing separate tax forms, a tax refund resulting from one type of income (if any) can be credited against a tax liability resulting from another type of income. In such cases, we prepare a tax credit request to the tax office to minimise the amount to be paid by the expatriate and to ensure that the tax refund is offset by the tax office against tax due.

Post-filing assistance

Tax liabilities in Poland expire five calendar years after the end of the year in which the annual tax return was submitted. During this period, the tax authorities may verify whether the return was duly prepared and may request supporting documentation or calculations.

It is also our responsibility to deal with such requests, unless we agree otherwise with the client. Therefore, we take over the correspondence with the tax office and provide the documentation we have in our files. Only if the latter is not enough, or the authorities require some specific documents which we do not have (e.g. concerning the health of the expatriate or their immediate family), do we need to ask the expatriate to engage.

Additional support

If the expatriate is subject to tax equalisation, we can prepare the calculation comparing their hypothetical tax liability with the actual one, in order to determine whether any further reconciliations between them and the employing company are required. In addition, if the expatriate is remunerated on a net basis and also has non-employment income taxable in Poland, we typically prepare an additional reconciliation to calculate what amount of Polish tax results from non-employment income and should be covered by the expatriate.