How to settle the tax for a Ukrainian citizen working in Poland?

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How to settle the tax for a Ukrainian citizen working in Poland?

Ukrainian citizens who work in Poland may, in accordance with the tax law, accept the status of residents or non-residents, depending on their place of residence. How the tax will be settled for a citizen of Ukraine depends, inter alia, on from this status. An employed foreigner may purchase the so-called a security certificate, which means that you are resident in a given country. The above certificate is issued by the relevant tax administration authority, which confirms in the certificate the place of residence of the taxpayer or its registered office in order to determine the taxpayer's subject to the tax regulations of a given country.

It is worth pointing out that currently most countries apply two principles of income taxation, i.e. the principle of residence to which all income of a taxpayer residing in a given country is subject, regardless of the source of its origin, or the principle of source, according to which only income generated is taxed. in that country, regardless of the taxpayer's place of residence.

Tax resident status

It is worth noting that Poland has over 90 agreements concluded with other countries in order to avoid double taxation (cf. Article 4a of the Personal Income Tax Act). Considering the above, Poland is a party to the agreement with Ukraine of January 12, 1993 (Journal of Laws of 1994, No. 63, item 269), according to which the tax for a citizen of Ukraine does not have to be double-settled.

It should be noted that the resident status of a citizen of Ukraine is subject to unlimited tax liability in Poland. The above should be understood as meaning that all employee's income is subject to taxation regardless of the location of the sources of income, and moreover, the foreigner should:

  • have a place of residence on the territory of the Republic of Poland, have a center of personal or economic interests (center of vital interests) on the territory of the Republic of Poland, or

  • stay in the territory of the Republic of Poland for more than 183 days in a tax year (cf. Article 3 of the Personal Income Tax Act).

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The above was confirmed in the judgment of the Supreme Administrative Court of January 5, 1999, file reference number III SA 2836/97, stating that in the case of natural persons residing in the territory of the Republic of Poland, the taxpayer's entire income is subject to taxation regardless of where they are located. sources of income.

It is also worth mentioning the judgment of the Supreme Administrative Court of March 22, 2001, file reference number SA / Sz 2226/99, in which it was stated that income tax in the country is also applicable to income obtained by persons residing here, due to employment performed with employers having their registered office or place of residence. living abroad.

It should be emphasized that being subject to unlimited tax law in Poland is independent of citizenship and the source of income or the place of the country where they were obtained. Thus, a citizen of Ukraine with resident status is subject to the same tax rules as any other employee with Polish citizenship or the so-called Polish tax residence. In this case, the tax for a citizen of Ukraine should be settled on the PIT-28, PIT-36, PIT-37, PIT-38, PIT-39 forms, depending on the income obtained.

It is worth adding that employers are obliged to:

  • calculating and collecting income tax advances during the year, as well as settling them by the 20th day of each month,

  • issuing PIT-11 or PIT-40, by the end of February of the year following the tax year,

  • to submit to the tax office by the end of January of the following year, the annual PIT-4R declaration, which will constitute the declared amounts of the collected income tax advances and advances in the amount due for the given months, (these will not necessarily be advances actually paid to the tax office).

No tax resident status

It is worth mentioning that employees from Ukraine who work in Poland without the status of a resident are subject to tax law only in the sphere of generated income subject to taxation in Poland. According to the Personal Income Tax Act, it is the so-called limited tax liability. Non-resident foreigners usually do not have a permanent place of residence in Poland, and their tax settlement should apply to income obtained on the basis of:

  • work performed in the territory of the Republic of Poland on the basis of a service relationship, employment relationship, homework and a cooperative employment relationship, regardless of the place of payment of remuneration;

  • activities performed in person on the territory of the Republic of Poland, regardless of the place of payment of remuneration;

  • business activity conducted on the territory of the Republic of Poland, including through a foreign establishment located on the territory of the Republic of Poland;

  • real estate located in the territory of the Republic of Poland or rights to such real estate, including the sale of it in whole or in part or the sale of any rights to such real estate (cf. Article 3 (2b) of the Personal Income Tax Act).

In a situation where an employee from Ukraine has the status of a non-resident, in accordance with the tax law, he receives income from a service relationship, employment relationship, homework or a cooperative employment relationship. In this situation, the tax for a citizen of Ukraine should be settled on general principles, according to the so-called tax scale. In addition, he should submit a tax return on the PIT-37 form by April 30 of the following year.

It is worth remembering that he may also submit PIT-12 statements if he does not want to fill in the PIT return himself. Then the contribution payer calculates the annual tax on the income earned by the taxpayer in PIT-40. The employer should prepare and provide the employee and the relevant tax office with information on income, advances for income tax in PIT-11. As for a foreigner from Ukraine, a non-resident who carries out activities in person, on the basis of a company management contract, a management contract, but does not run a business, he is subject to a flat tax in accordance with the 20% rate. Therefore, in this situation, the tax for a non-resident Ukrainian citizen does not have to be recognized by submitting a tax return on the PIT-37 form. In this situation, the payer is either the employer or the service provider.

It is worth adding that in the case of employees from Ukraine who have the status of non-residents, but have a place of residence in any country of the European Union, they may settle their income differently than with the 20% rate, while in accordance with the so-called tax scale. In the above situation, the collected flat-rate tax should be indicated as an advance on personal income tax, moreover, it will be necessary to submit the so-called certificate of residence of the country in which the place of residence has been indicated for tax purposes. Poland should also be a party to an agreement with the country indicated in the certificate of residence, concluded in order to avoid double taxation. Then the payer should submit in paper form (by the end of January of the following year) or in electronic form (by the end of February of the following year) information on the IFT-1 / IFT-1R form on the amount of income earned by Ukrainian citizens who do not reside in Poland .

Tax for a citizen of Ukraine and the competence of the Tax Office

It is worth recalling that the competent tax offices for foreigners' taxes are determined in accordance with § 5 para. 2 point 2 of the regulation of 22 August 2005 on the properties of tax authorities, the local jurisdiction of tax authorities in matters of taxation with personal income tax from non-residents who do not conduct business activity. Therefore, in the case of employees from Ukraine and non-residents, the key factors in determining the proper seat of the tax office are:

  • the place of residence or the address of the seat of the payer, if the tax is collected through the payer;

  • the place of residence of the taxpayer, if the tax is collected without the intermediation of the payer;

  • place of work or performance of activities which generate income.

In conclusion, the tax for a citizen of Ukraine working in Poland, due to his place of residence, can be paid in Poland or in Ukraine. It is worth remembering that the condition of staying in the territory of Poland, for a total of 183 days a year, permanent residence and the status of the so-called tax resident means being subject to unlimited tax liability in Poland. Thus, the tax obligation applies to all earned income, regardless of the source of it.

In a situation where an employee from Ukraine does not have a place of residence in Poland, has the status of a non-resident, then he is subject to the so-called limited tax liability, i.e. only on income earned from work in Poland. Thus, the tax for a non-resident and resident Ukrainian citizen is accounted for on the same terms as for Polish employees. Collecting tax advances is carried out in accordance with the Polish Personal Income Tax Act.