Since the outbreak of the war, thousands of Ukrainian citizens have moved their lives to Poland. Many of them continue to work remotely for Ukrainian companies, especially in IT, finance and specialised services. The problem is that some still pay tax only in Ukraine, assuming that if their employer is based in Kyiv, the Polish tax authorities “have nothing to do with it”. This is one of the most common and potentially most expensive mistakes.
Tax advisers increasingly encounter cases in which Ukrainian citizens, after several years of living in Poland, approach them with overdue tax returns, accrued interest and, in some cases, exposure to fiscal penal liability. Many are unaware that the key issue is not the country where the employer is based, but where the person lives and performs their work.
“Many Ukrainians today believe that if tax is withheld by a Ukrainian employer, Polish PIT does not apply to them. However, once they exceed 183 days of stay in Poland or move their centre of vital interests here, their tax situation may change dramatically,” says Tomasz Prokurat, partner at the law firm Litigato.
The 183 days that change everything
Polish tax rules are clear on this issue. An individual becomes a Polish tax resident if they:
- stay in Poland for more than 183 days in a tax year, or
- have their centre of vital interests in Poland, including, for example, a home, family, children attending school or their main source of income.
It is enough to meet just one of these conditions for Poland to expect the person to settle tax on their entire income, including income earned from work for a foreign employer. In practice, this often affects people who have been living in Poland almost permanently since 2022, renting apartments and working remotely from Warsaw, Kraków or Wrocław, while formally continuing to settle tax only in Ukraine.
“It should be remembered that tax authorities may carefully analyse the actual situation of a given resident: in which country they hold bank accounts, where bills are paid, or even with which mobile network operators they have contracts. These seemingly minor details may have a fundamental impact on which tax residency is ultimately entered into the register,” says Mateusz Zubik, Project Manager at Smart Solutions HR.
“For the Polish tax authorities, two questions are important: whether a given person is a Polish tax resident and where the work is actually performed. If the answer to the first question is ‘yes’ and to the second is ‘100% from the territory of Poland’, then there is undoubtedly an obligation to settle tax on that remuneration in Poland. Moreover, taxation in Poland will also apply in many cases where the answer to only one of these questions is affirmative. The Polish-Ukrainian double taxation treaty provides that income from employment performed in Poland may be taxed in Poland even if the person performing the work is not a Polish tax resident and Ukraine may still consider that person its own resident. Technically, a mechanism for eliminating double taxation should apply, but this does not happen automatically,” says Tomasz Prokurat, partner at Litigato.
The biggest myths
The most common problems arise from the mistaken belief that if tax has already been paid in Ukraine, the Polish tax authorities cannot claim it again. Double taxation treaties determine which country has the right to tax income in a given situation. If both countries have that right, only then do mechanisms for avoiding double taxation apply, such as tax credits or exemptions.
To avoid double taxation, the income must be properly reported in Poland as well, and the tax paid abroad may need to be disclosed. Failure to act may result in a double problem: tax withheld in Ukraine and tax arrears in Poland.
“The mere fact of working in Poland does not always mean that there is an obligation to settle all income in Poland. However, after exceeding 183 days of stay or moving the centre of vital interests here, the tax situation may change completely. From the perspective of a temporary employment agency, this is currently one of the most common problems in PIT settlements for employees from Ukraine. For example, an employee often lives and works in Poland for most of the year but still believes they settle tax only in Ukraine. As a result, tax arrears, errors in declarations or the need to file corrections arise. Proper analysis of tax residency, ongoing document control and employee education already at the start of cooperation are crucial,” says Mariana Zubryk, Project Manager at Smart Solutions HR.
Another widespread myth is the belief that as long as the employer is Ukrainian, Poland has no right to tax the income. Under Polish PIT rules, the two key factors are tax residency and the place where the work is actually performed. If someone physically works from Poland, even remotely for an employer in Kyiv or Lviv, or also in Berlin or London, then from the perspective of the Polish tax authorities, their remuneration has a very strong connection with Poland.
Consequences of failing to settle tax in Poland
Failure to meet tax obligations in Poland may have several consequences. First, financial: tax arrears arise, increased by interest, often for several years. In well-paid professions such as IT, this can mean very significant amounts.
Second, there is the risk of fiscal penal liability. Long-term failure to disclose income in Poland, combined with permanent residence in the country, may be treated as a fiscal offence or misdemeanour.
Third, there is an international dimension. The longer such a situation continues, the harder it may become to recover tax paid in Ukraine or to properly account for it in Poland.
The risk also applies to Ukrainian companies. If key employees permanently perform work from Poland, Polish authorities may consider that the foreign company is operating in Poland through a so-called permanent establishment. This may create an obligation for those Ukrainian companies to settle CIT in Poland.
What should be done?
Ignoring the problem is the worst possible solution. The first steps should be to:
- calculate the actual time spent in Poland,
- analyse where the centre of vital interests is located,
- check whether there is an obligation to file overdue PIT returns,
- organise the model of cooperation with the foreign employer.
In many cases, it is possible to reduce the risk and avoid sanctions, especially if the taxpayer takes action before the tax office does. In the era of remote work, national borders may seem less visible in everyday life, but they still matter greatly to tax authorities. If someone has lived and worked in Poland for years, the simple belief that “tax is paid in Kyiv” may turn out to be very costly.
