Employing remote workers who are based in Poland may create a
permanent establishment for your business in the country.
Unfavourable treatment for taxpayers as a result of this is
becoming increasingly common and so employers need to be alert to
the current rules.
The COVID-19 pandemic popularised remote work arrangements.
While this work model has implications for employees' personal
income tax ('PIT'), it can also significantly impact
corporate income tax ('CIT') compliance for the employer.
This is because when work is performed in a country other than the
employer's registered location, this may establish a foreign
permanent establishment ('PE') in that country.
In recent years, Polish tax authorities and Administrative
Courts have frequently examined the issue of remote work and its
implications. Importantly they have recently adopted positions that
are increasingly unfavourable to taxpayers, including
employers.
