Remote work in Poland: Beware the hidden tax trap
Konrad Gańczarczyk
by Konrad Gańczarczyk
Foreign companies deciding to employ staff in Poland under a remote work model must be aware of the risk in creating a permanent establishment (PE) in Poland. If such an establishment arises, the company is obliged to calculate and pay corporate income tax in Poland on the profits attributable to that establishment, which creates additional compliance and administrative burdens for the employer. This issue is further aggravated by the prevailing, unfavourable interpretative approach to PE rules adopted by the Polish tax authorities.
A home office can be a permanent establishment
The Polish tax authorities maintain a consistent interpretative approach regarding remote work and the creation of a PE. According to the tax authorities, “in the era of remote work, the place where an employee performs work for a foreign employer (whether from home or another location) may be regarded as a separate establishment of that enterprise”.
According to the authorities, the fact that a company does not require the employee to work from home does not prevent the creation of a PE in Poland.
However, different conclusions can be drawn from the OECD Model Tax Convention on Income and on Capital (2017). The commentary notes that where a cross-border employee performs most of their work from home rather than from an office provided by the enterprise in another country, the employee’s home is not at the disposal of the enterprise, as the enterprise does not require that the home be used for its business activities.
Precedent-setting ruling of Supreme Administrative Court
On 19 February 2025, the Supreme Administrative Court issued a landmark judgment, which stands in clear contrast to the previously strict interpretative approach taken by the tax authorities.
The case concerned the question of whether the model of performing work in a home office leads to the creation of a PE in Poland in the meaning of tax law. The court held that merely providing employees with computer equipment enabling them to perform their duties remotely does not, in itself, constitute sufficient grounds to establish such a permanent establishment.
Moreover, the court emphasised that where an employer does not require home office employees to work from a specific location (e.g. their home), this fact weighs against the existence of a permanent establishment. In practice, employees may use company equipment in various locations, which prevents attributing to the employer any right of disposal over a particular space.
In addition, the Supreme Administrative Court pointed out that the lack of actual control by the employer over the place of work clearly indicates that such a place is not at the employer’s disposal. Consequently, it is difficult to conclude that the mere performance of work under a home office model creates a PE in Poland.
Shift in the approach of tax authorities?
Unfortunately, it appears that the Supreme Administrative Court’s ruling has not led to a change in the strict and formalistic approach adopted by the tax authorities with respect to remote work and the creation of a PE, as illustrated by an individual ruling issued by the Director of the National Tax Information on 23 May 2025.
It is worth noting that, when applying for this ruling, the taxpayer explicitly referred to the aforementioned landmark judgment of the Supreme Administrative Court, along with the reasoning presented therein. However, these arguments were entirely disregarded by the tax authority. The tax authority rightly emphasised that the creation of a PE does not require the enterprise to hold a formal legal right to use a particular facility. Nevertheless, in such cases, it would be necessary to examine whether the premises in which the employee performs their duties are in fact at the employer’s disposal, as the Supreme Administrative Court indicated in the above cited judgment.
It therefore seems that, despite the taxpayer-friendly ruling of the Supreme Administrative Court, the unfavourable interpretative line developed by the tax authorities will prevail. Foreign companies employing staff in Poland under a home office model should be prepared for the risk of a permanent establishment being created in Poland. In such a scenario, employers would be obliged to pay corporate income tax in Poland on the profits attributable to that establishment.
GGI member firmPenterisWarsaw, PolandT: +48 22 257 83 00
Law Firm Services, Tax
Penteris is a dynamic European law firm dedicated to supporting investors in staying ahead of market trends. By focusing on “getting things done” efficiently and fostering “long-term relationships”, Penteris delivers tailored legal solutions that meet the evolving needs of its clients.
Konrad Gańczarczyk has experience in ongoing tax advisory services to companies operating in the real estate, construction, and IT sectors. He is actively involved in the identification and reporting of tax schemes, and in the preparation of comprehensive transfer pricing documentation. Contact Konrad.
