Non-resident - who is it, what are his privileges and duties?

Co-Size-Changing

Pursuant to the applicable regulations, the taxpayer may have the status of a resident or non-resident. The tax residence status depends on whether the taxpayer is domiciled in Poland or not. Who is a non-resident, what are his privileges and what are his duties? We answer in the article.

Non-resident - who is that?

A non-resident is a person who, within the meaning of tax regulations, does not have a place of residence in the territory of Poland.

In other words, a non-resident is:

  • a natural person residing abroad;

  • a legal person established abroad;

  • other entities based abroad that have the ability to acquire and acquire rights on their own behalf;

  • branches, representative offices and enterprises established abroad by residents;

  • foreign diplomatic missions, consular offices and other foreign representations;

  • special missions and international organizations enjoying diplomatic or consular immunities and privileges.

The non-resident is subject to limited tax liability. This means that only their income, which they obtained in the territory of the country, is subject to taxation in Poland.

What income in Poland must be taxed by a non-resident?

As mentioned above, if a given taxpayer is not a resident of Poland, he will only tax the income he earned in Poland on the territory of the country. This tax is applied to income obtained from:

  • work performed in the territory of Poland on the basis of an employment 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;

  • real estate located in the territory of the Republic of Poland (this also applies to the sale of such real estate).

Non-resident and personal tax settlement

Pursuant to Art. 13 of the PIT Act, work performed under:

  • performance of services,

  • a business management contract, a management contract or a contract of a similar nature;

  • contract of mandate or contract for specific work for the client who is an entrepreneur;

  • creative activity (journalistic, educational, scientific, artistic, literary, coaching);

  • science, culture, journalism and art competitions;

  • practicing sports, acting as a referee at sports competitions;

  • other activities, the revenues from which qualify as source for activities performed personally.

Income obtained by a non-resident from activities performed in person are subject to flat-rate income tax in the amount of 20%. At the same time, the employer who prepares the IFT-1R information by submitting it to the taxpayer and the tax office competent for taxation of foreign persons is considered to be the payer of this tax.

In such a situation, the non-resident is not required to submit a declaration on the amount of income earned / loss. However, if he is a non-resident residing in the territory of the European Union, the European Economic Area or the Swiss Confederation, he has the right to do so. Then, the collected flat-rate tax constitutes an advance on personal income tax. When submitting an annual tax return, a non-resident must attach a certificate of residence of the country in which he is resident.

The non-resident has to file an annual tax return by April 30th after the end of the year for which the tax return is submitted.

Non-resident submitting a tax return in Poland versus tax preferences and reliefs

A non-resident who earns income and settles it in the annual tax return in Poland has the right to benefit from allowances and deductions that may reduce the tax liability.

A non-resident may make a joint settlement in Poland with his spouse or as a single parent. However, for this to be possible, in addition to the basic conditions, the non-resident must also have a residence identified through a certificate of residence. Moreover, in order to benefit from these preferences, the income earned by a non-resident in Poland must be at least 75% of the total income.

A non-resident has the right to take advantage of tax reliefs, e.g. pro-family relief or internet relief, provided that he / she submits an annual PIT-36 or PIT-37 declaration in Poland.

Tax reliefs are available to foreigners on the same terms as to Polish citizens. It should also be borne in mind that they do not need to have a Polish residence.

How to determine the jurisdiction of the tax office for a non-resident?

The local jurisdiction of tax authorities in matters of income taxation for non-residents is determined taking into account:

  • 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 performance of activities for which income is generated, in particular with regard to the place of performance of services (work), if the properties cannot be determined in the manner indicated in any of the above-mentioned ways.