DGP: Pole in a foreign company? Tax authorities will demand tax in Poland

Michał Thedy, tax adviser, partner at Thedy & Partners, commenting on the proposed change of regulations, pointed out in the newspaper that taxpayers who have their registered office or place of management in Poland are subject to taxation in our country on their entire income (unlimited tax obligation). Those who do not have a registered office or place of management in Poland are subject to taxation in our country only with respect to income earned in Poland. The proposed changes introduce the principle that a taxpayer has a management board in Poland if persons or entities that sit on the controlling, constituting or managing bodies of the taxpayer have their place of residence, seat or management board in Poland or actually, directly or indirectly through other entities, manage the current affairs of the taxpayer, including on the basis of an agreement creating it, a court decision or other document regulating its establishment or functioning, powers of attorney granted or factual relations.
The wording of the provision in question is unclear. It may be presumed that the intention was to provide that a foreign entity becomes a Polish taxpayer if Polish tax residents sit on its bodies or if such residents actually manage its operations. It is not clear whether all members of the authority must be Polish tax residents or whether it is sufficient that only one person is a Polish tax resident. Certainly, making the residency dependent solely on the residency of the members of the bodies of a given entity does not seem reasonable. The place of management of a given entity (whether in a formal or factual manner) should be decisive, and not the place of residence of the members of its bodies.
The entire article was published in Dziennik Gazeta Prawna dated 2 August 2021, page B3