For many residents of Poland, and especially for foreigners, the issue of taxes is one of the most complicated and incomprehensible. After all, in Europe tax activities are introduced efficiently and it is not possible to avoid paying taxes.
As you may have already realized, our today's article will be dedicated to taxes, namely the tax resident certificate. How to understand that you are a tax resident of Poland and what is the purpose of the relevant certificate, what it can save you from - this is what we will tell you in our article today. Here we go!
Who is a tax resident?
It is actually very simple - a person is considered a tax resident of the Republic of Poland if:
- Poland is the person's country of residence
- The place of residence is determined by the residence address (registration).
- The person is officially employed in Poland and pays taxes to the state.
- The person resides in Poland for at least 183 days per year (this is considered a long stay in a foreign country).
Why does a foreigner need to obtain a tax residency certificate in Poland?
When you come from another country, you are registered there as a tax resident and pay taxes to your home country. This is where the term «double taxation» comes into play. Imagine: you come to Poland and work on the basis of «umowa zlecenie», in this case you fall under double taxation, so you have to pay taxes both in Poland and in your home country.
The certificate of tax residency in Poland will allow you to establish your tax residency, and most importantly it will allow you to:
- Receive higher wages
- Pay less income tax
- At the end of the tax year, calculate your PIT-11 tax return in PIT-37 and get another cash refund per child
IMPORTANT: the validity of the tax residency certificate in Poland is one year from the date of issue.
Is it possible not to obtain a certificate of tax residency in Poland?
When you arrive at your place of work, you should get a tax residency certificate, especially if you are going to work on the basis of an «umowa zlecenie» or «umowa o dzieło» contract. The most important thing is to do it before you start getting paid. That is, as soon as you get a job, you must immediately submit this CFR-1 certificate to your employer.
Disadvantages if you do not have a certificate of tax residency in Poland:
- Lower net salary, as the amount of the approach tax will be 20% instead of 17%. You will receive a smaller amount of money. So you will lose 600+ PLN every month (depends on the rate).
- You will not be able to file a PIT-37. In Poland there is such an opportunity to refund taxes. For this purpose, you can file a mandatory PIT-37 tax return on the basis of a PIT-11 tax return received from your employer. You can read more about it in our article about tax returns.
- You will not be able to take advantage of the child benefit, i.e. get a cash refund for a child.
What documents are required to obtain a CFR-1?
You will need to take these documents with you to Urząd:
→ Your passport
→ Preferably «umowa najmu mieszkania».
→ Your «umowa zlecenie» or «umowa o dzieło» or other contract with the employer
→ Your PESEL
Obtaining a tax residency certificate in Poland in Urząd
This certificate can be obtained from the tax office in Urząd. This can be done near your place of work or near your place of residence. You can find the address of your Urząd office here.
The service will cost you 17 PLN and the certificate is issued within 1-2 hours. However, it happens that people wait for this certificate for up to 7 days.
To apply for a CFR-1 certificate, you will need to bring the necessary documents (we have written them above) and fill in a special form. The special form can be downloaded in advance from the official website and printed out.
Obtaining a tax residency certificate in Poland online
There are two current ways of doing this: through the ePuap portal and by submitting an electronic declaration. We go to the website, log in to our account, look for the tab «Pismo ogolne» and click. This is how we send our application for a certificate to the inspectors.
Conclusions
To summarize this article, we can conclude that if you are a foreigner staying in Poland for more than 183 days, officially working on the basis of «umowa zlecenie» - the best solution for you is to obtain a tax residency certificate. It will allow you to save a lot of money on tax deductions. Moreover, you can obtain the certificate in one day in Urząd or online, and the whole procedure will cost you 17 PLN.
