Analysis

Additional tax remitter’s duties – change of declaration templates (PIT-11, PIT-40)  

Tax Alert 15/2015

22 October 2015

Beginning form 01 January 2015 template declarations, returns and information forms submitted by tax remitters are changed. The most important change concerns template PIT-11 information form prepared by tax remitters inter alia with respect to employees. The new template PIT-11 concerns the income generated after 01 January 2015 and necessitates conducting broader analysis of the tax situation of employees, especially mobile employees assigned to work abroad and foreigners working in Poland.

PIT – new duties burdening the employer acting as the tax remitter

The most important change to PIT-11 form concerns section C (taxpayer’s identification data and address of residence) in which the tax remitter now has to define the taxpayer’s tax liability, namely whether the taxpayer has:

  • unlimited tax liability, i.e. this concerns individuals who have their place of residence in the territory of Poland – Polish tax residents;    
  • limited tax liability, i.e. this concerns individuals who do not have their place of residence in the territory of Poland – Polish tax non-residents.

By implication, as of 1 January 2015 tax remitters are required to determine the status of tax residence of their employees within the meaning of the provisions of the Personal Income Tax Act.   As far as mobile employees are concerned, i.e. individuals assigned to work abroad or those who have come from abroad to work in Poland, the above modification may trigger the obligation to recognize the tax situation of the employee in the other country and to analyse the relevant double taxation treaties to which Poland is a party. Regarding individuals recognized as non-residents in Poland, the tax remitter needs to indicate their address of residence abroad and the foreign tax identification number assigned in their country of tax residence.  

In addition, it needs to be stressed that the tax remitter’s duty to establish the tax status of the employee applies also in case the tax remitter prepares the declaration of the annual statement regarding tax on the income obtained by the taxpayer (PIT-40) instead of PIT-11.

The obligation to submit the properly prepared PIT-1 form to the tax office and to the employees burdens the tax remitter.  Therefore, considering that only a few months are left for preparation of PIT-11 forms pertaining to 2015, it is worthwhile to make the proper adjustments to the company’s payroll system and collect the employees’ data required to analyse their tax residence status from the perspective of the PIT-11 and PIT-40 requirements. 

PIT Establishment of the employee’s tax obligation – implications for the employer

The changes introduced into the PIT-11 template undisputedly necessitate more active engagement of the tax remitter when it comes to verification of the employee’s tax status in view of the Polish, and in some situations also international regulations, including:       

  • assessment of the length of the employee’s stay in Poland and abroad; 
  • establishment of the place of stay of the employee’s closest family and/ or their stronger economic links (centre of vital interests);
  • examination of the employee’s tax liability in the country to which the employee has been assigned or the country from which they come;
  • obtaining and indicating the employee’s identification for tax purposes (or for social insurance purposes) in the country of their residence; 
  • determination of local competence – the competence of the tax office.
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