Advice on declaring Freelance income from the UK in Poland

Hello all,

Last year I quit my job in the UK to move to Poland with my wife, who's from Poland. Initially I was living off of savings but after a few months managed to convince the firm I had been working for in the UK to allow me to work on a freelance basis. Although I haven't made that much money yet, the problem is I have not declared any of the income I have earned thus far. And now its looking like I will have continuous work so I want to get things set up properly.

The main reason I haven't got around to registering as self-employed was b/c I was not sure how long we'd be in Poland (this was initially a temporary move) and also I figured I could pay the taxes on completed work once a firm was set up or make a declaration at the end of the tax year. Then I learned that in Poland, unlike the UK, a self-employed person usually pays taxes on a monthly basis, rather than at the end of the year. But apparently this varies, according to the type of work you do and what type of tax you choose to pay (i.e. flat rate, progressive etc.)

I am not really comfortable about this and want to set things straight. However, I find the Polish system so complicated and confusing that it makes things really difficult to do so. The main thing I am worried about is getting a heavy fine for not yet declaring some of the work I've already done prior to registering as a sole trader.

Does anyone have any personal experience with this, or advice they can provide? How much would a fine be for this sort of thing, if any? Hopefully this can be resolved fairly painlessly.

Many thanks.

if your firm in the uk is giving you work - work which all the while allows you to stay in poland ,, - why bother registering in poland ???????

being freelance in the uk - is so much easier ,, a good uk accountant and your sorted - p.s i know of one who is very cheap , very informal and very good.

I'm resident in Poland so you pay tax where you live for more than 183 days or something like that... So being a freelancer in the UK is not really possible.

Found this on the Polish Ministry of Finance Website:

"The lump sum tax rates on registered revenue could be for example:"
 20 % for revenue from freelance professions"
 8,5 % for revenue from services, incl. catering connected with the sale of beverages containing over 1.5 % alcohol,
 5,5 % for revenue from production and construction works,
 3,0 % for catering services, with the exception of revenue from the sale of beverages containing over 1.5 % of alcohol.
(finanse.mf.gov.pl/en/pit1/basic-information)

Its not totally clear but it seems to me that you can pay tax in a lump sum if you are a freelancer... just not sure how it works if you started earning income before officially registering as a sole trader...

Have you paid tax on that money in the UK? If so, you have no problems. If you haven't, just declare it to the Polish tax office and pay what you owe.


Good, that means the 'centre of your vital interests' was not in Poland and thus you weren't a Polish tax resident (assuming that you haven't been here for more than 183 days, even if you have you'll probably be OK). Just contact your local tax office and tell them that as the centre of your vital interests was UK and not Poland, you were planning to pay the tax in UK and not Poland. However, now your plans have changed, you recognise that your tax status will have changed and you want to pay the tax in Poland rather than in the UK. They might be a bit surprised (a lot of Poles would just say nothing and pay no tax anywhere).


I really isn't that bad once you get it set up. Yes it is annoying (for example you need to make three separate transfers every month to ZUS) but it's not that bad.


As long as you contact them and tell them that you think you owe them money and will pay it as soon as they tell you how much, you are very unlikely to have to pay more than the amount of the tax you owe and the interest which has built up since the date that they think you should have paid it. Don't worry about it. My former accountant screwed up my accounts for 2008 and then when they wrote to question the accounts she didn't bother to forward the letters from the tax office to me or tell the tax office that she was no longer my accountant. So they just helped themselves to my bank account: the full amount of the tax plus penalty interest and a small administration fee. No fine.

Thanks Harry. I appreciate the response.

It seems that things probably won't be as bad I initially thought.

My questions now are:

Do I declare the previous earnings under my sole trader company once it is set up, or do I have to do this separately, just as an individual filing a personal tax return at then of the year?

And, which type of sole trader company is best for a freelancer? It is likely that I would move into 32% tax territory next year and I would prefer to avoid that by setting up a company where I can enjoy the 19% flat tax. Ideally I would like to be able to expense certain costs, such as travel to the UK on business, mobile phone and perhaps even a company car. Does anyone know anything about this sort of stuff?

Many thanks

I'd imagine it's the latter but you'd be best off asking the tax office which one they would prefer you to do (i.e. ask them for a ruling about how the tax should be paid), that way they can't change their mind later.

There is only one type of dzialalnosc gospodarcza. I'd certainly go for the 19% flat tax option. Make sure you register the company for everything you even vaguely think is slightly possible you might want to try your hand at, otherwise you have to waste time adding things to the list of what your company's purpose is (apparently registering a company which has the purpose of 'doing things which make me money' is not allowed).

Thanks again Harry.

I guess my question is about which tax arrangement to chose as a sole trader. Since I will need to travel to the UK on business on occasion I'd like to be able to expense these trips against my income.

Apparently there are three options:

- The regular Personal Income arrangement where one pays 18% tax on earnings up to 85,528 zl and then 32% on everything above this amount. - NOT very attractive unless you can expense a lot of things. Otherwise I don't know why anyone would choose this option.

- The 19% flat tax rate. - Not sure what you can and cannot expense.
- And something called "ryczałt" where there an option to pay a flat tax of 20% for freelancers. - From what I understand no book keeping is required but also can't expense anything.

If anyone has any experience with this sort of thing I'd love to hear what they think.

Many thanks.

As I recall, it's not so straight forward - some tax schemes can only be used by some groups of people. For instance, the "freelancer" tax rate isn't available to all freelancers, but rather those who practice certain professions.

You'd be best consulting an accountant and seeing what they say.

Thanks. Am meeting with an accountant this week.

Yeah definitely not very straight forward...not much in Polska really is as far as I can tell...

It is fairly straightforward once you decide on these things.

For what it's worth, you can deduct a hell of a lot of things, so you would be highly unlikely to even go near the 32% bracket.

Hi JZ33,

I am on the same situation as you.
Been hired for a job here in Poland (KRK) by UK company (started Jan-2014).

I am still looking how to pay taxes, and set up my own company to declare those 19%.
Already went to declare myself at city office and i am waiting for my PESEL, i think only after that i can register in the tax office (but all of these offices have non-engish speaking employees.. so i really dont know how will it go)

I thought on getting an accountant but here in KRK im being asked for 220zl/month!!

Can you please update me on your progress to see if that can help me in any way?

Thanks!

is it too cheap?

That's not a bad price. I pay 246zl per month here in Warsaw (200zl plus VAT), so the actual cost to me is 162zl.

Have you got the permission to be self-employed from the gmina yet? Also, I'm pretty sure you still need to go to GUS and am sure that you also need to go to ZUS as well as the tax office.

There was an idea to have a 'one-stop shop' where one could do all the stuff needed (permit, PESEL, ZUS, GUS and tax) but nothing seems to have happened with that idea, but I suppose it was first raised only a decade ago....

I don't have personal experience, but it is possible to open a company through Internet:
youtube.com/watch?v=-Gak6FweBTc

Hi gquintela,

I hired an accountant for 150zl per month, but they are not in Krakow but in the Bieszczady region where I have some family connections. They do a decent job but I think they could be more professional. I am finding in Poland the communication is not always the best. Still kind of rough around the edges.

The accountant helped me set up the firm and it was actually more straight forward than I had expected. I'm a Polish citizen so this might be why (I'm not sure if you are)

From what I remember I just needed to get a REGON, NIP, and then sign up for ZUS, and register as a VAT tax payer. Its worth registering for a EU VAT number as well. When you buy things with your company the Tax office will refund some or all of the VAT you paid. Its a nice perk of having a company here as you can reduce your tax base and pay lower costs for things like computer equipment, smartphones etc. Stuff you would need for a business.

Hope that helps.