The definition of the certificate of tax residency has been contained in the Act on PIT since January, 1st 2007. Under this notion, one needs to understand the declaration concerning the place of tax payer residence for the taxation purposes issued by the respective tax authority of the country of tax payer residence (Article 5a, section 21 of the Act on PIT).
The proper certificate of residency issued for the natural person is a document in which the foreign tax administration authority confirms the tax residency of a given natural person, which is in the possession of the residential place by this person for the taxation purposes on the territory of a given country. It is equivalent to the treatment of such a person in this country as a person subject to the absolute tax obligation.
This document is issued in order to avoid double taxation in the light of the bilateral agreements on double taxation.
Those treaties do not determine the form of the declaration concerning the place of residence or seat. Furthermore, the following certificate of residency not always is issued in a formalized form. It also does not have to contain directly the name of “Certificate of residency”. However, it should fulfill the conditions given below:
- Is to be issued by a respective tax administration authority
- It should determine the place of residence (the residential place or the place of seat) that is the tax payer place for the taxation purposes
- It should contain the issuance date of the certificate that is the date on which the tax residency is confirmed.
The certificate is to be current for the date of remuneration payday.
It is the tax payer himself who holds the responsibility for the issues concerning settlements with the tax office and the obligation of the certificate of residency is rested upon him. Moreover, he is also responsible for handing the certificate over to the human resources department of his employer.
The absolute tax obligation in Poland rests upon natural persons if they are in the possession of the residential place on the territory of the Republic of Poland or whose presence in the territory of Poland exceeds the amount of 183 days in a fiscal year. Those individuals are liable for the tax on all of their income in Poland, regardless of the location of their sources of income.
So basically, one has to deal with two types of different groups of foreigners:
- Those who reside on the territory of Poland for more than 183 days in a given fiscal year – and subject to the absolute tax obligation
- Those who reside on the territory of Poland for a period shorter than 183 days and subject to the limited tax obligation.
Persons subject to the limited tax obligation in Poland, pay tax on all its domestic and foreign income, irrespective of the location of sources of income.
Assignation of the tax obligation is applied also according to the principle of source, that is according to the place in which a given income is generated and the construction of the so-called limited tax obligation. Such a broad designation of the Polish fiscal jurisdiction may lead to the occurrence of double taxation of the same income generated by an individual both in the country of residence and in the country of the source of income.
