Tax customs & excise

Taxation of employment revenue of Ukrainian citizens in Poland

1. Taxation of Ukrainian individual hired directly by Polish local entity

Place of taxation

Any foreigner (incl. Ukrainian citizens) hired directly by the local Polish entity to perform employment at the territory of Poland – will be taxed in Poland from day one – art. 3. 2a and 2b of the Polish Personal Income Tax Act (PIT Act).

Applicable rate

Taxation will be similar as in the case of Polish citizens, so as a rule, tax rates 12% and 32% will apply for the profit above 120.000 PLN.

Double taxation

The fact that this remuneration is taxed in Poland does not exclude the possibility of taxation of this very remuneration again in Ukraine if the individual remains a tax resident of Ukraine.

In accordance with art. 15 of Polish Double Taxation Treaty (DTT) with Ukraine: “wages, salaries and other similar remuneration derived by a resident of a Contracting State from an employment shall be taxable only in that State unless the service is exercised in the other Contracting State. If the work is done there, the wages and salaries derived therefrom may be taxed in that other State.”.

As per our best knowledge Ukrainian residents’ Polish revenue will be taxed again in Ukraine for the tax rate surplus in Ukraine + military charge.

Ukrainian citizens may avoid double taxation only by moving its tax residency to Poland – this would however trigger unlimited tax obligation in Poland.

Tax reporting, tax withholding in Poland

Tax reporting, tax withholding and payment shall be performed monthly by the employer (Polish entity).

2. Taxation of Ukrainian individual seconded to Poland from Ukraine for the period not exceeding 183 days

Place of taxation

Polish Double Taxation Treaty (DTT) with Ukraine allows the individual employee to keep on paying taxes in Ukrainie only in circumstances of seconding to Poland from Ukraine.

Art. 15 of the PL- UA DTT allows taxation of revenues only in Ukraine if the following conditions are met:

  1. a) the recipient of the remuneration stays in Poland for a period or periods not exceeding 183 days in total during the calendar year in question; and
  2. b) remuneration is paid by or on behalf of an employer who is not a resident of Poland, and
  3. c) the remuneration is not borne by an establishment or fixed base which the employer has in Poland.

Summary – seconding to Poland

As a result, Ukrainian resident  can continue paying taxes in Ukraine if, s/he is posted to Poland for a period shorter than 183 days and s/he continues to be paid by a Ukrainian entity and such entity does not have a permanent establishment in Poland.

3. Taxation of Ukrainian individual seconded to Poland from Ukraine for the period exceeding 183 days

Place of taxation

If a Ukrainian individual is delegated to Poland for a longer time than 183 days –  s/he will be subject to taxation in Poland from day one.

If a Ukrainian individual is delegated to Poland for a shorter period of time than 183 days but for any reason whatsoever  overstays 183 days in Poland –  s/he will be subject to taxation in Poland from day one.

Applicable rate

Taxation will be similar as in the case of Polish citizens, so as a rule, tax rates 12% and 32% will apply for the profit above 120.000 PLN.

Double taxation

The fact that this remuneration is taxed in Poland does not exclude the possibility of taxation of this very remuneration again in Ukraine if the individual remains a tax resident of Ukraine.

In accordance with art. 15 of Polish Double Taxation Treaty (DTT) with Ukraine: “wages, salaries and other similar remuneration derived by a resident of a Contracting State from an employment shall be taxable only in that State unless the service is exercised in the other Contracting State. If the work is done there, the wages and salaries derived therefrom may be taxed in that other State.”.

As per our best knowledge Ukrainian residents’ Polish revenue will be taxed again in Ukraine for the tax rate surplus in Ukraine + military charge.

Ukrainian citizens may avoid double taxation only by moving its tax residency to Poland – this would however trigger unlimited tax obligation in Poland.

Tax reporting, tax withholding in Poland

Tax reporting (PIT-36), tax withholding and payment shall be performed monthly by the employee himself art. 44. 3d. of the Polish Personal Income Tax Act (PIT Act) .

4. Summary

Scenario

 Taxation place

Ukrainian citizen hired directly in Poland under employment contract with Polish entity Taxed in Poland and possibly in Ukraine (if remains Ukraina tax resident)
Ukrainian individual seconded to Poland from Ukraine for the period exceeding 183 days Taxed in Poland and possibly in Ukraine (if remains Ukraina tax resident)
Ukrainian individual seconded to Poland from Ukraine for the period not exceeding 183 days Taxed only in Ukraine
Author team leader DKP Legal Michał Dudkowiak
Contact our expert
Write an inquiry: [email protected]
check full info of team member: Michał Dudkowiak

Contact us

Flaga Polski.POZNANPOLAND
Zamkowa 7/11
61-768 Poznan
+48 61 853 56 48[email protected]
Flaga Polski.WARSAWPOLAND
Rondo ONZ 1
00-124 Warsaw
+48 22 300 16 74[email protected]
Flaga Polski.WROCLAWPOLAND
Swobodna 1
50-088 Wrocław
+48 61 853 56 48[email protected]
Flaga Polski.KRAKOWPOLAND
Opolska 110
31-355 Kraków
+48 61 853 56 48[email protected]
Flaga Polski.ZIELONA GÓRAPOLAND
Jana Sobieskiego 2/3
65-071 Zielona Góra
+48 61 853 56 48[email protected]