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Not earning yet but spending from previously earned money and other Poland tax issues


seancameron 3 | 4
10 Oct 2011  #1
Dear All,

i am newcomer, seems this forum is great help for new comers to Poland!

I have couple of questions, i hope someone there can help:

1- I am foreigner, married to polish, and moved to Poland a year ago, though during this year i have been in and out for various job interviews abroad, and for some academic conferences being myself an academic, and also for visiting my family back home. All this year, i have been spending money from my bank account out of Poland via my credit card, using local atm machine; this money is what i have earned in the last 3 to 5 years before coming to Poland. Do i have to pay any taxes to Poland other than the usual VAT?

2- I don't have NIP yet, is that a problem in my case with no job yet in Poland? will they ask me later about that, i mean when times come to apply for permanent residency ?

3- I receive some money from my family abroad sent to my account abroad, and i could get this through my foreign credit card via poland atm; any income taxes due to pay? will they come to me after a year and ask me how i am getting money, and how i am surviving? and is it ok if i am withdrawing from a foreign account in another country via atm machine in poland?

4- Meanwhile, i might get a job contract signed (crossing fingers!!) within the coming month, as i just had successful interview in dubai. In such a case, if i will start working for them by travelling back and forth, do i need to pay tax in Poland for the income earned abroad?

5- Lastly, i am thinking about another alternative-in case no contract signed, which is to open an offshore company in my country backhome, and try to get some marketing and hopefully some private clients (i teach and work in interior design). If i succeed in gettting some clients out of poland (i am planing to market it within the middle east), and i prepare their design work at my home in poland, will i need to pay taxes in poland in case i will earn?

...sorry for all these questions, but any answer will be a great help.

Thanks!

Sean
Wedle 16 | 496
11 Oct 2011  #2
, but any answer will be a great help.

Out of the last twelve months how many days have you been living in Poland full time.
Wedle 16 | 496
11 Oct 2011  #4
If you are spending more than 180 days a year in Poland, you are a Polish resident and must pay tax on your world wide income here.
delphiandomine 83 | 17,625
11 Oct 2011  #5
2- I don't have NIP yet, is that a problem in my case with no job yet in Poland? will they ask me later about that, i mean when times come to apply for permanent residency ?

Yes, if you want to go down that road. They'll be looking for 5 years of work history.

and is it ok if i am withdrawing from a foreign account in another country via atm machine in poland?

Technically, yes - you should be declaring this income. Poles can be jealous types - if the taxman comes calling and you've got a nicely furnished flat with all sorts of electrical goodies, but no job - it might arouse suspicion. However, your situation isn't uncommon.

4- do i need to pay tax in Poland for the income earned abroad?

If you spend more than 185 days a year here, yes.

5- will i need to pay taxes in poland in case i will earn?

Of course. You'll be resident in Poland, and will pay tax accordingly. For what it's worth - dividends are taxed at 19%.
wielki pan 2 | 250
11 Oct 2011  #6
Poles can be jealous types

Sorry Mr D have to challenge you with this one, my understanding is that if where you come from a country which has a taxation agreement with Poland you do not pay tax unless the money earned was derived from Poland, the agreement is such that a person should not be taxed twice... are you telling me that tourist have to pay income tax
hythorn 3 | 580
11 Oct 2011  #7
my understanding gentlemen lies in between

we have established that our friend here (who really ought to post under another name if that is your real name as let's not make life too easy for the tax authorities)

is treated as a Polish tax payer
the money he is given as a present which should be declared as income unless it comes from his father
fathers can give unlimited gifts to sons tax free in Poland
so you are in the clear if that is the case

now I am far too lazy to check for you what would happen if the money was coming from your maiden aunt or second cousin once removed but you get the gist and

you are probably alright

good luck with the job hunt

if you get the Dubai job count the number of days you spend in Dubai

there are lots of things that you can do regarding the tax and Dubai but they are not for a public forum
if you get the job spend 500 quid seeing a tax advisor
it will be worth it in the long run

waits for the inevitable ..... but I know a man in the pub who can give you tax advice for the price of a kotlet dinner....

you need to use someone good to give you tax advice so if the men from the tax office come knocking you can show
them the letter from your advisor as a get out of jail card and if necessary sue your tax advisor for giving you bum advice
wielki pan 2 | 250
11 Oct 2011  #8
but I know a man in the pub who can give you tax advice for the price of a kotlet dinner

I don't think Mr B would accept a free kotlet, your comments only fuel more confusion, How is the tax office going to know where the money comes from, besides its his money and tax has been paid....
hythorn 3 | 580
11 Oct 2011  #9
Sir, it is I who am confused

who is Mr B?

if you get rumbled, the taxman looks at your financial affairs and starts asking awkward questions

If I gave you a hundred zlots as you are a nice person and I am ridiculously generous
you ought to declare that income, the fact that I paid tax on it is irrelevent
wielki pan 2 | 250
11 Oct 2011  #10
[quote=hythorn]you ought to declare that income, the fact that I paid tax on it is irrelevent
<!--

its a gift not income.....
hythorn 3 | 580
11 Oct 2011  #11
its a gift not income.....

I do not want to sound like I am bickering

however in most countries if you are given a gift it is treated as income, non taxable within certain limits
depending on the country

for example in the UK you can give someone a few thousand quid every year
any more than that and they have to pay tax on it
unless they give you the money as a loan

in Poland fathers can give their adult children unlimited sums of money without the child
having to pay tax on it
but they should declare the income (even though it is a gift) but would not be taxed on it

the rules about gifts are quite well established otherwise I could give my employees their
salaries and tell them that this week the company is giving them a gift

and this is exactly how it used to happen in Poland in the mid 90s
workers were receiving cash 'presents' from firms to commemorate the boss' daughter's birthday,
the date the firm was founded etc
this got cracked down on by ZUS
wielki pan 2 | 250
11 Oct 2011  #12
Don't confuse fringe benefits like a company car/rent etc, this forms income, but giving somebody a few hundred zlote, fair crack of the whip, get serious will you...what happens to a person working in the UK and transfers his money to a Polish Bank, has he to pay more tax,, don't think so.
hythorn 3 | 580
11 Oct 2011  #13
looks like we have had a complete misunderstanding

let me clarify

I was not talking about fringe benefits I was talking about money
i have not mentioned fringe benefits at any time
some Polish firms used to pay their workers wages for the month of August but they would call it a present
so that they did not have to pay as much ZUS

i do not remember how the scam worked but I did not take part in it as it was tantamount to fraud

the 100 PLN gift example was made in jest but the principal is the same if you give someone money as a present they ought to declare

it they probably would not be taxed on it if it is a small sum but that is the law

if you transfer your own money to another account you do not have to pay tax on it as it is your own money
if someone else gives you money, you should be declaring it and it may be taxable
OP seancameron 3 | 4
11 Oct 2011  #14
Wow, great discussion so far, still many questions either still unanswered or arised:

-can the tax office-if they want- track the credit card account out of poland to really confirm that the money comes from father? do i have to confirm that the money is given by my parents? but in most of the cases, i get the money hand to hand from parents when i visit them every 3 months, i can legally bring - according to eu law- up to 9 999 euro without decalring them. And frankly, if i bring even this limit (though never that much yet) , i don t need more for 3 months of living.

-u mentionned ab getting a tax advisor: any help regarding a good list of tax advisors for foreigners who have income/money coming from abroad? where i can get someone in warsaw?

-i don t have bank account yet in poland, will that cause a problem, or actually it will ease the situation?

to be continued...
hythorn 3 | 580
11 Oct 2011  #15
Sean, if your name is Sean

please do not be posting on here using your real name

I am serious

if Sean Cameron is a fictitious name, then no problem
delphiandomine 83 | 17,625
11 Oct 2011  #16
Sorry Mr D have to challenge you with this one, my understanding is that if where you come from a country which has a taxation agreement with Poland you do not pay tax unless the money earned was derived from Poland

It still must be declared - when dealing with foreign income, it's best to declare everything and pay what's owed rather than trying to hope that the tax office doesn't find out. Of course, tourists don't have to pay - they're not resident for more than 185 days a year.

you need to use someone good to give you tax advice so if the men from the tax office come knocking you can show
them the letter from your advisor as a get out of jail card and if necessary sue your tax advisor for giving you bum advice

Such a letter wouldn't count - the only thing that's binding in Poland is a personalised decision from the tax office.

but they should declare the income (even though it is a gift) but would not be taxed on it

Exactly. Making a declaration is the safe way forward - of course, they might question it, but that's where documentary proof comes in.

As in any country - if you're resident for tax purposes, they can do what they want. Best just to declare the income and save yourself trouble down the line.
cms 9 | 1,272
11 Oct 2011  #17
You would be much better served paying an accountant to look at this for you rather than rely on the advice of amateurs on here - all the big and middle sized firms are in Warsaw, speak English and for EUR 500 you would get 2-3 hours of someone good and a memo.

Delphian is right that such a memo is not a get out of jail free card - but in reality unless you are dealing with millions then the tax authorities won't often take you on if you have one as they don't fancy court cases where the bigger firms are defending tax payers.

And dont get too paranoid about posting your name here - I've been dealing with polish tax offices for 13 years and never met anyone who could speak more than a few sentances of English. Most of them just want a quiet life and even those that are keen generally recognize that expats bring investment and jobs to Poland so will give you some latitude and some time to fill in formalities so long as you are not actually being dishonest.
PWEI 3 | 612
11 Oct 2011  #18
Sound advice.
hythorn 3 | 580
11 Oct 2011  #19
a good point sometimes I let my sense of humour run away with me but having a letter from PWC puts you in a much stronger position
wielki pan 2 | 250
11 Oct 2011  #20
You would be much better served paying an accountant to look at this for you rather than rely on the advice of amateurs on here

we are not talking about million dollar transactions hmm, you may want to read this link: krakow-info/taxes.htm
OP seancameron 3 | 4
11 Oct 2011  #21
Dear Wielki pan,

i read the link, and one thing attracted my attention:(highlighted in bold in this following paragraph)

'Personal income tax (PIT)

is paid both by Poland’s citizens and by permanent residents. Having lived in the country for 184 days or more over a calendar year the latter have their overall income taxed unless they represent foreign company in Poland or work for a corporation established with foreign capital. Otherwise only the Polish earnings are taxable. The personal income tax is paid on a monthly basis and the deadline for yearly tax returns is April 30. '

...my question is: as i have been checking recently the option of having an offshore company registered in my country back home, i read that in poland one can open representative office of that company but without doing business locally, but out of poland. does this previous paragraph applies to representative office? one of my options-as i posted before- is to have my company registered back home, operate in the middle east , have clients in the middle east, but have repreentative office in poland for marketing purposes. does that then demand from me to pay income tax? in addition, if i want to hire local polish person for that representative company to work in poland's representative office, am i eligible to do so?
wielki pan 2 | 250
11 Oct 2011  #22
Best to seek professional advice on this one, I was only trying to highlight the double tax rules, ie a person living in Poland receiving a pension from the UK say is taxed in the UK, he cannot be taxed again in Poland.... A person transferring money to a Polish bank account from the UK cannot be taxed on that amount, it has already been taxed..if it were otherwise nobody would bother relocating..... you should read the tax agreement between Poland and the country you come from..


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