Foreign Income Tax Poland 2026: Complete Reporting Handbook

Practical guide for individuals tax resident in Poland with income from abroad  ·  Updated for 2025 income / filed in 2026  · 

If you are tax resident in Poland and earn income outside Poland, you are required to report it in your Polish annual tax return, regardless of where the tax was paid. This handbook covers residency rules, double tax treaties, the correct forms (PIT-36, PIT-38, PIT ZG), RSU and stock options, rental income, foreign pensions, CFC risk and available reliefs.

Tax Residency Double Tax Treaties PIT-36 & PIT-38 RSU & Stock Options UAE / No-Treaty Countries Settlement Tax Relief

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1. Who must report foreign income in Poland

The obligation to declare foreign income in Poland applies to every individual who qualifies as a Polish tax resident for the relevant tax year. Polish tax law applies the concept of unlimited tax liability: if you are a Polish resident, Poland has the right to tax your worldwide income, including income sourced in other countries.

Polish tax residency is determined by two alternative tests set out in the Personal Income Tax Act:

  • Centre of vital interests test: your personal or economic ties are centred in Poland (family home, property, primary employer, bank, social life).
  • 183-day test: you spent more than 183 days in Poland during the calendar year.

Meeting either test is sufficient to establish Polish tax residency. You do not need to meet both.

If you are uncertain whether you were a Polish tax resident in a given year, you can use the free diagnostic tool available at Polish Tax Residency Test before making any filing decisions.

The obligation applies to all years in which you were a Polish tax resident. It does not apply retroactively to years in which you did not hold Polish tax residency.

2. Mixed residency year: moving to Poland mid-year

If you moved to Poland during the tax year, the question of from which date Poland taxes your worldwide income is one of the most practically important issues in cross-border tax planning. The answer depends on when you acquired Polish tax residency.

Polish tax residency is not acquired on a fixed date determined by registration or administrative action. It arises from the facts: specifically, from the moment your centre of vital interests shifted to Poland or from the day you exceeded 183 days of presence in Poland in that calendar year. Identifying that moment requires a factual analysis of when your family, home, employment and social ties became predominantly Polish.

For the period before acquiring Polish tax residency, you were a non-resident and Poland had no right to tax your worldwide income. Only Polish-source income (if any) was subject to Polish tax during that period. From the date residency was acquired, unlimited tax liability applies.

Practical implication

If you moved to Poland in May and started working for a Polish employer, you may owe Polish tax on your pre-May foreign income only if you were already a Polish tax resident before May. This depends entirely on your individual facts. Do not assume the answer either way without analysis.

If you are uncertain from which date Polish tax residency applies to you, we assess the residency onset date as part of the full tax return service.

3. Dual residency and treaty tie-breaker rules

It is possible to simultaneously meet the domestic residency criteria of two countries, for example Poland and the UK, or Poland and Germany. In this situation, two tax administrations may each claim the right to tax your worldwide income.

Double tax treaties address this through a tie-breaker clause (typically Article 4(2) of the OECD Model). The tie-breaker applies a sequential test: permanent home, then centre of vital interests, then habitual abode, and finally nationality. The first criterion that produces a clear result determines which country is your treaty residence.

Applying the tie-breaker in practice is rarely straightforward. It requires a factual analysis of your housing arrangements, family situation, economic ties and patterns of presence in each country. The result is not always predictable, and the two tax authorities may not agree on the outcome.

This requires professional analysis

Dual residency situations involve significant tax risk in both countries. If you believe you may be tax resident in two countries simultaneously, we recommend a structured review before filing in either jurisdiction.

4. CRS and the tax office's visibility into foreign accounts

Poland is a full participant in the Common Reporting Standard (CRS), the OECD framework for the automatic exchange of financial information between tax administrations. Under CRS, banks, brokerage houses, insurance companies and other financial institutions in participating countries collect and report account data to their local tax authority, which then automatically shares it with the taxpayer's country of residence.

The practical consequence is significant: the Polish tax authority receives regular reports on foreign accounts held by Polish residents, including:

  • bank account balances and interest income,
  • dividends paid to the account,
  • income from the sale of financial instruments,
  • rental income paid through the account,
  • account holder identification and tax identification numbers.

CRS currently covers all EU member states, the UK, Switzerland, Norway, Australia, Canada, Singapore and many other jurisdictions. FATCA operates in parallel for US-connected accounts. In practice, undisclosed foreign accounts are no longer a realistic strategy. The data exchange is automatic and does not require any individual request from the Polish authorities.

Practical implication

If you hold a foreign bank account, brokerage account or investment account and you are a Polish tax resident, you should assume the Polish tax office has access to the data. Non-disclosure exposes you to interest on unpaid tax, penalty surcharges and in serious cases criminal fiscal liability.

5. Sources of foreign income subject to reporting

Employment and board remuneration abroad

Remuneration received from a foreign employer or for work performed abroad is subject to settlement in Poland on PIT-36 with PIT ZG. This includes salary, bonuses, director fees and any employment-related benefits in kind. The applicable double tax treaty determines whether the income is taxed in Poland or only affects the progression of the tax rate.

Foreign rental income

Rental income from real estate located outside Poland must be declared in Poland. It does not matter whether local tax was withheld in the source country. The applicable double tax treaty method will determine whether there is any additional Polish tax liability.

Dividends from foreign companies

Dividends paid by a foreign company to a Polish resident are subject to capital gains tax in Poland at a flat rate of 19%. Depending on the applicable double tax treaty, withholding tax deducted abroad may be credited against Polish tax. Dividends are reported on PIT-38 with PIT ZG.

Brokerage and investment accounts abroad

All transactions on foreign brokerage accounts, including the sale of shares, ETFs, bonds, investment fund units, structured products and derivatives, must be settled in Poland. The absence of a Polish information document from the foreign broker does not affect the obligation: it arises directly from the law, not from the document. Income from these instruments is reported on PIT-38 with PIT ZG.

Cryptocurrencies

Income from the disposal of cryptocurrencies is treated as capital gains in Poland and settled on PIT-38 at 19%. This applies regardless of the country of the exchange or wallet provider. The cost base is the documented purchase price converted to PLN at the appropriate NBP exchange rate.

Foreign pensions and social security payments

Foreign pension income paid to a Polish resident must be declared in Poland. The applicable double tax treaty will determine whether Poland has the right to tax the pension and by which method. Cross-border pension settlements require careful analysis of both the treaty and the domestic classification of the income.

Interest from foreign bank accounts

Interest credited to foreign bank accounts is generally subject to Polish capital gains tax at 19%. Where withholding tax is deducted abroad, the applicable treaty credit rules apply.

6. Stock options, RSU and ESPP: Polish tax treatment

Equity compensation from foreign employers is one of the most frequently mishandled areas in Polish cross-border taxation. IT employees, managers and executives receiving stock options, restricted stock units (RSU) or employee stock purchase plan (ESPP) benefits from foreign companies are often unaware of when and how Polish tax applies.

When does income arise?

The timing of income recognition is the first critical question and it differs by instrument:

  • Stock options: Polish tax practice generally recognises income at the moment of exercise (when you buy shares at the option price), not at grant. The taxable amount is the difference between the market value of the shares at exercise and the price paid.
  • RSU (Restricted Stock Units): income arises at vesting, when the shares are transferred to you. The taxable amount is the market value of the shares on the vesting date. There is no cost to the employee at vesting, so the full market value is income.
  • ESPP (Employee Stock Purchase Plan): income typically arises at the point of purchase, reflecting the discount received compared to market price. Further income may arise on subsequent sale.

PIT-36 or PIT-38: which form applies?

This is a genuinely contested area of Polish tax law and the classification has changed over time as a result of court rulings and interpretations.

The general current position is as follows:

  • At vesting / exercise: the benefit received (the discount or free shares) is treated as employment income or other income (przychód z innych źródeł) and declared on PIT-36. It is subject to progressive rates (12% / 32%).
  • On subsequent sale of the shares: the gain from selling the shares (calculated as proceeds minus the value already taxed at vesting/exercise) is capital gains income declared on PIT-38 at 19%.

This two-stage treatment means the same shares may appear in both PIT-36 and PIT-38 in different years. Incorrect classification, for example treating the entire gain as capital gains on PIT-38 and missing the employment income component at vesting, is one of the most common errors.

Double taxation risk

Where a foreign employer withheld income tax at source on the vesting/exercise event (which is common in the UK and US), the credit mechanism under the applicable treaty should be applied. Where no foreign tax was withheld, the full Polish rate applies to the income component. On the subsequent sale, Polish capital gains tax applies regardless of where the shares are held or sold.

Keep your documentation

For RSU and options you need: the grant agreement, the vesting schedule, market price on each vesting/exercise date, any employer tax withholding statements, and the subsequent brokerage transaction history. Without this documentation, correct reporting is not possible.

For a detailed breakdown of RSU and stock option taxation, see the RSU Tax in Poland guide or contact us through the tax return service page.

Further reading

7. Foreign employer paid no tax abroad: what this means in Poland

One of the most persistent misconceptions in cross-border taxation is the assumption that the absence of tax in the source country means no obligation in Poland. This is incorrect and can lead to significant underpayments and penalties.

The most common situations where no foreign tax is paid include:

  • UK personal allowance: a salary that falls entirely within the UK personal allowance (£12,570 for 2025/26) attracts no UK income tax. Under the Poland-UK treaty (proportional deduction method), there is no UK tax to credit, and the full Polish tax applies to the income.
  • UAE employment: the UAE levies no personal income tax. The Poland-UAE treaty uses the proportional deduction method, but with zero UAE tax to credit the Polish liability is unreduced.
  • Remote work for any foreign employer: where work is physically performed in Poland and the foreign employer does not withhold Polish tax, no foreign tax will typically be deducted either. The employee must self-report and pay the full Polish tax.
  • Dividends within foreign tax exemptions: some jurisdictions have dividend exemption regimes or participation exemptions. If the dividend is exempt from source-country withholding, no credit is available in Poland.

The proportional deduction method does not create a floor of zero tax. Where foreign tax is zero, the credit is zero and the Polish tax is calculated in full on the income.

8. Rental income from foreign property

If you own real estate outside Poland and receive rental income, that income must be declared in your Polish annual tax return for every year in which you are a Polish tax resident.

Which treaty method applies?

Most Polish double tax treaties follow the OECD Model and grant primary taxing rights over real property income to the country where the property is located (the source country). The method applied in Poland depends on the specific treaty:

  • Under the exemption with progression method (e.g. Germany, France), rental income from a property in that country is exempt from Polish tax but is included to determine the Polish tax rate on other income.
  • Under the proportional deduction method (e.g. UK), the rental income is included in the Polish tax base and any tax paid in the source country is credited proportionally. If the source-country tax is lower than the Polish tax, a top-up applies.

Practical examples by country

UK property: rental income from a UK property is reported on PIT-36 with PIT ZG (UK). The proportional deduction method applies. UK tax paid (if any) is credited. If UK rental income falls within the UK personal allowance or the property allowance and no UK tax is paid, the full Polish progressive rate applies.

Spanish property: rental income from Spain is reported on PIT-36 with PIT ZG (ES). The applicable method should be verified under the Poland-Spain treaty. Spanish withholding tax on rental income paid by the tenant may be creditable.

German property: Germany has primary taxing rights. The exemption with progression method generally applies in Poland, so German rental income is exempt from Polish tax but affects the Polish rate on other income.

Currency conversion

All rental amounts must be converted to PLN using the NBP rate from the business day preceding each payment date. If rent is paid monthly, a separate NBP rate applies to each payment.

Polish tax on rental income: which rate?

Foreign rental income included in the Polish tax base is subject to the standard progressive scale (12% / 32%) when declared on PIT-36. Polish domestic rental income may alternatively be subject to ryczałt (flat rate), but this option does not apply to foreign rental income reported via PIT-36 under treaty obligations.

9. Interest from foreign bank accounts and savings

Interest credited to foreign bank or savings accounts is taxable in Poland for Polish tax residents. This includes interest on current accounts, savings accounts, term deposits and similar instruments held at non-Polish financial institutions.

Under Polish domestic law, interest income is classified as capital gains income (przychody z kapitałów pieniężnych) and taxed at a flat rate of 19% on PIT-38. Where the interest arises from a foreign source, PIT ZG should be attached where foreign tax paid is disclosed or treaty credit rules apply.

Many foreign banks deduct withholding tax on interest at source. Where a double tax treaty exists, this withholding tax is creditable in Poland up to the proportional limit. Common withholding rates in treaties are 5% or 10% on interest; where the source-country rate is lower than the Polish 19%, a top-up applies.

Where no withholding tax is deducted (for example, in many EU countries following the abolition of the EU Savings Directive withholding), the full 19% Polish rate applies without any credit.

CRS reminder

Interest income is one of the data categories reported under CRS. The Polish tax authority receives automatic information about interest credited to foreign accounts held by Polish residents. This income is not invisible to the tax office even if no document is sent to the taxpayer.

10. Owning a foreign company: UK Ltd, UAE free zone, Delaware LLC

Polish tax residents who own or control foreign companies, whether a UK limited company, a UAE free zone entity, a Delaware LLC or any other structure, face a range of Polish tax issues that go beyond simple income reporting.

Key risk areas include: the classification of remuneration and dividends drawn from the company, the question of where the company is effectively managed (which may affect its tax residency), CFC rules (see below), and the disclosure obligations under Polish tax law for ownership of foreign entities.

This area requires individual analysis

The tax consequences of owning and operating a foreign company from Poland depend heavily on the specific structure, the country of incorporation, the nature of activities and how the company is managed. General rules are difficult to apply without a full review of the facts.

If you own or control a foreign company from Poland, contact us through the tax return service page for a structured review.

11. CFC rules: a warning for owners of foreign companies

Poland introduced Controlled Foreign Company (CFC) rules (przepisy o zagranicznych jednostkach kontrolowanych) which require Polish tax residents who control certain foreign entities to include a portion of the entity's undistributed profits in their Polish tax base, even if no dividend is paid.

The rules apply in particular to entities located in low-tax jurisdictions or jurisdictions that do not exchange tax information with Poland. UAE free zone companies, Hong Kong entities and structures in other low-tax locations may fall within the CFC regime depending on the specific facts.

CFC is a complex, fact-specific area

Whether your foreign entity falls within Polish CFC rules depends on ownership thresholds, the nature of the entity's income, the effective tax rate in the source country, and other conditions. If you own or control a foreign company in a low-tax jurisdiction, a CFC analysis should form part of your annual tax review.

12. How Poland's double tax treaties work

Poland has concluded double tax avoidance agreements with over 80 countries. The primary function of these treaties is to allocate taxing rights between the country of source (where the income arises) and the country of residence (where the taxpayer lives). They do not eliminate reporting obligations. They determine how the tax is calculated.

Two methods of avoiding double taxation

Polish treaties use one of two methods to prevent the same income from being taxed twice:

Method How it works Polish tax effect
Exemption with progression
(zwolnienie z progresją)		 Foreign income is excluded from the Polish tax base but is added to Polish income solely to calculate the effective tax rate applicable to Polish income. No additional Polish tax on the foreign income itself. However, if you also have Polish income, the rate may be higher due to progression. If you have no Polish income, there is effectively no Polish tax liability.
Proportional deduction
(odliczenie proporcjonalne)		 Foreign income is included in the Polish tax base. Tax paid abroad is credited against the Polish tax due, up to the proportion that the foreign income represents of total income. If the foreign tax rate equals or exceeds the Polish rate, there is no additional Polish tax. If the foreign tax was lower (or zero), a top-up liability arises in Poland for the difference.

Which method applies?

The method is specified in each bilateral treaty and varies by income type. Employment income, business profits, rental income and dividends can each be governed by different methods even under the same treaty. It is essential to read the relevant treaty article (usually Article 15 for employment, Article 6 for real property, Article 10 for dividends) rather than assuming a single method applies to all income categories.

Limitation on benefits and anti-abuse rules

Polish domestic law includes general anti-avoidance rules (GAAR) and specific anti-avoidance rules that can override treaty benefits in artificial arrangements. Structures that lack genuine commercial substance or that are established primarily to obtain treaty benefits carry a material risk of challenge. Since 2019 Polish tax authorities have been increasingly active in examining cross-border arrangements under these provisions.

MLI (Multilateral Instrument)

Poland has ratified the OECD Multilateral Instrument (MLI), which modifies a large number of Poland's bilateral treaties to introduce a Principal Purpose Test (PPT) and, in some cases, a simplified Limitation on Benefits (LoB) clause. These modifications affect the availability of treaty benefits in structures that may not reflect genuine economic activity. The MLI came into force for Poland in 2019 and its effect must be considered when relying on treaty positions.

Not sure which method applies to your income?

Treaty analysis is a core part of the full tax return service. We determine the correct method for each income type and each country of source.

See the service

13. Key treaty countries: method and practical notes

Country Method (employment) Method (dividends) Key practical notes
Germany Exemption with progression Proportional deduction (15% WHT limit) Employment income exempt in Poland. Progression applies if there is also Polish income. Dividends taxed at 19% in Poland with credit for German withholding.
United Kingdom Proportional deduction Proportional deduction UK employment income included in Polish base; UK tax credited. If UK income falls within UK personal allowance (zero tax), full Polish tax may apply. Dividends: UK WHT creditable up to proportional limit.
Netherlands Verify before filing Proportional deduction (15% WHT limit) The applicable method for employment income should be verified under the current treaty text and MLI modifications before filing. Common for Polish residents working in the Netherlands or holding Dutch company shares.
United States Proportional deduction Proportional deduction (15% WHT limit) FATCA additionally requires US persons to report. Polish residents with US brokerage accounts must report on PIT-38 in Poland regardless of US tax treatment.
Switzerland Exemption with progression Proportional deduction (15% WHT limit) Swiss withholding tax on dividends (35%) can generate a refund entitlement at source. The amount credited in Poland is capped by the treaty rate.
France Exemption with progression Proportional deduction (15% WHT limit) French employment income exempt in Poland with progression.
Ireland Proportional deduction Proportional deduction (15% WHT limit) Common for Polish residents working remotely for Irish technology companies. Careful analysis required where employment involves both Polish and Irish duties.
Norway Proportional deduction Proportional deduction (15% WHT limit) Norwegian employment income taxed in Poland; Norwegian tax credited proportionally.
UAE Proportional deduction Proportional deduction Poland has a double tax treaty with the UAE. Tax paid in the UAE is creditable in Poland up to the proportional limit. In practice, UAE income is often tax-free at source (no UAE income tax), which means there is no foreign tax to credit, and the full Polish rate applies. See Section 6 for details.

The above represents a simplified overview. Each treaty must be read in full and applied to the specific facts of each case. Treaty interpretation in Poland is also informed by the commentary of the OECD Model Convention and Polish administrative practice.

14. UAE and countries without a double tax treaty with Poland

Most common misconception

Many people assume that if a country imposes no income tax, like the UAE, there is also no tax obligation in Poland. This is incorrect. Even where a double tax treaty exists and allows a credit for foreign tax paid, if no tax was actually paid abroad there is nothing to credit. The Polish liability remains in full.

United Arab Emirates (UAE)

Poland has a double tax avoidance treaty with the UAE (the agreement between the Republic of Poland and the United Arab Emirates, as amended by subsequent protocols). The treaty provides for the proportional deduction method for both employment income and dividends: tax paid in the UAE is credited against Polish tax up to the proportional limit.

The practical consequence for most Polish tax residents with UAE income is, however, the same as if no relief existed: the UAE does not levy personal income tax, which means the UAE tax paid is typically zero. With no foreign tax to credit, the full Polish progressive rate applies to the income.

This affects, among others:

  • employees of UAE companies working remotely from Poland,
  • shareholders receiving dividends from UAE-registered entities,
  • individuals receiving rental income from UAE real estate,
  • freelancers invoicing UAE clients from Poland.

Individuals who physically worked in the UAE in a prior period and then moved to Poland should carefully verify in which year Polish tax residency began. Income earned in a year of non-residency is not subject to Polish tax. The issue arises from the year of residency onset onwards.

Countries without a treaty with Poland

Where Poland has not concluded a double tax treaty with the source country, Polish domestic law applies. Under Polish domestic rules, the proportional deduction method is used as the default: tax paid in the source country is credited against Polish tax up to the proportion that the foreign income represents of total income. If no tax was paid in the source country, the full Polish tax applies.

Relevant examples for Polish residents include: Hong Kong, Saudi Arabia, Qatar, Bahrain and Kuwait. In all these cases the practical effect is similar to the UAE situation, source-country tax is often zero or minimal, and the Polish liability is not reduced by a credit. Always verify the current treaty status before drawing conclusions, as Poland continues to expand its treaty network.

UAE income requires careful analysis of your residency status and the year the income was earned. See the full tax settlement service for details.

15. Remote work for a foreign employer: Polish tax implications

Working remotely from Poland for a foreign company is now one of the most common cross-border tax situations. The tax treatment depends on several factors: where the work is physically performed, where the employer is located, and what the applicable double tax treaty says about employment income.

The general rule: where the work is performed

Under most Polish double tax treaties (which follow the OECD Model Convention), employment income is taxable in the country where the work is physically performed. If you sit in Poland and work, Poland has the right to tax your salary, regardless of where your employer is incorporated or where it pays you.

This has one important consequence: a foreign employer paying a salary to a person physically working in Poland is generally not required to withhold Polish income tax. The Polish resident employee must instead settle the tax themselves through a Polish annual tax return (PIT-36 with PIT ZG).

When the source country also taxes the income

Some treaties contain provisions that allow the source country to also tax employment income in certain circumstances, for example, if the employee spends part of the year working physically in the employer's country, or if specific conditions regarding the employer type are met. In these cases both countries may have partial taxing rights and the applicable treaty method (exemption or deduction) must be applied proportionally.

The 183-day rule: what it means in practice

Many treaties contain a "183-day rule" that exempts employment income from source-country tax if the employee is present in that country for fewer than 183 days, is paid by an employer not resident there, and the costs are not borne by a permanent establishment. This rule is frequently misunderstood: it concerns the source country's right to tax, not Poland's. Poland's right to tax arises from residency and is not affected by the 183-day rule.

Employer withholding: common problem

Many foreign employers continue to deduct income tax in their own country even when the employee is working from Poland and the treaty allocates taxing rights to Poland. This creates a situation where tax is withheld at source but the Polish obligation also exists. The employee must file in Poland, apply the treaty credit (if any), and separately seek a refund from the foreign tax authority.

B2B arrangements: invoicing from Poland

Some individuals working for foreign companies operate through a Polish sole proprietorship (jednoosobowa działalność gospodarcza) and issue invoices. This changes the tax classification from employment income to business income, with different treaty articles and potentially different Polish tax treatment. The substance of the arrangement, control, tools, integration into the client's organisation, determines whether Polish or foreign tax authorities will accept the business income characterisation.

16. Foreign pensions and retirement income

Individuals tax resident in Poland receiving pension payments from foreign institutions must declare those payments in their Polish annual tax return. The treaty framework for pensions differs from employment income and requires separate analysis.

Treaty provisions for pensions

Most Polish double tax treaties contain a dedicated article for pensions (typically Article 18 or Article 19 in the OECD Model). The key distinction is between private-sector pensions and government pensions:

  • Private-sector pensions are typically taxable only in the country of residence. For a Polish resident, this means Poland has exclusive taxing rights and the pension is reported on PIT-36.
  • Government pensions (paid in respect of government service) are typically taxable only in the country that pays them. This means a Polish resident receiving a German or Dutch government pension may be exempt from Polish tax on that pension, but must still declare it in Poland and apply the exemption-with-progression method.

The distinction between private and government pensions varies by treaty and must be verified against the specific agreement with the source country.

UK pension income received in Poland

UK pension income requires separate treaty analysis, because the tax treatment depends on the type of pension and whether it is private, state or government-service related. Each category may be governed by a different article of the Poland-UK treaty and lead to a different result. A case-by-case review is necessary before drawing conclusions about the Polish tax treatment.

German pension (Rente) received in Poland

German pension income should be analysed under the pension article of the Poland-Germany treaty. The result may differ depending on the type of pension. The interaction between the two tax systems requires careful analysis, particularly given Germany's phased taxation rules for pensions (Ertragsanteil / Kohortenprinzip). Professional advice is recommended before filing.

17. Polish tax forms for foreign income: PIT-36, PIT-38 and PIT ZG

Which form do you need?

Income type Form PIT ZG required?
Foreign employment income (salary, bonuses, director fees) PIT-36 Yes, one per source country
Foreign rental income PIT-36 Yes, one per source country
Foreign business / sole proprietorship income PIT-36 Yes, one per source country
Foreign pension income PIT-36 Yes, one per source country
RSU / stock options, income at vesting / exercise PIT-36 Yes, where foreign tax paid
Dividends from foreign companies PIT-38 Yes, where foreign tax paid or treaty credit applies
Sale of foreign shares, ETFs, bonds, funds PIT-38 Yes, where foreign tax paid or treaty credit applies
RSU / stock options, subsequent sale of shares PIT-38 Yes, where foreign tax paid or treaty credit applies
Cryptocurrencies PIT-38 Generally not, crypto treated as domestic capital gains
Interest from foreign bank accounts PIT-38 Yes, where foreign tax paid or treaty credit applies

PIT-36: employment, rental and business income

PIT-36 is the Polish annual tax return for individuals whose income includes sources other than employment taxed through an employer. It is used to report foreign employment income, income from a foreign sole proprietorship, foreign rental income, foreign pension income and other categories not settled by withholding. If foreign income is reported, PIT ZG must be attached for each source country.

PIT-38: capital gains and investment income

PIT-38 is the form used for capital gains tax in Poland: income from the disposal of shares, ETFs, bonds, investment fund units, structured products, derivatives and cryptocurrencies, as well as dividend income. The standard rate is 19%.

PIT ZG: foreign income attachment

PIT ZG (Załącznik ZG) is attached to PIT-36 where foreign income is reported. For PIT-38, PIT ZG is attached where foreign income subject to Polish taxation is reported, in particular where foreign tax paid abroad is disclosed or treaty credit rules apply. A separate PIT ZG is required for each country of source. It captures the gross income, the foreign tax paid, the applicable treaty method and the resulting Polish tax calculation for that country.

No PIT-8C from your foreign broker?

This is normal and expected. Foreign brokers do not issue PIT-8C, the Polish information document that domestic brokers provide to their clients. The obligation to report arises from Polish law, not from any document you receive. You must calculate and report the income based on your own account history.

Related services and guides

18. Deadlines and currency conversion

Filing deadline

The Polish tax year follows the calendar year (1 January to 31 December). Annual tax returns for the previous year must be submitted by 30 April. For income earned in 2025, the deadline is 30 April 2026. Any additional tax due must also be paid by this date to avoid default interest.

Returns involving foreign income sources typically require additional preparation time due to the need to collect foreign documents, identify applicable treaty provisions and prepare PIT ZG attachments. Do not leave the settlement to the last days of April.

Currency conversion

All foreign income must be converted to Polish zlotys (PLN) for reporting purposes. The applicable rate is the average NBP exchange rate published on the business day preceding the date the income was received (or the date of the transaction in the case of capital gains).

For regular salary payments the rate changes with each payment date. For brokerage transactions each sale must be converted using the rate from the business day before the settlement date. The NBP exchange rate tables are available on the National Bank of Poland website.

Using the wrong exchange rate is one of the most common errors in self-filed returns with foreign income. The cumulative effect can be material, particularly on brokerage accounts with high transaction volumes.

19. Settlement Tax Relief (ulga na powrót)

If you transferred your tax residency to Poland after a period of living abroad and you are now a Polish tax resident, you may be entitled to the Settlement Tax Relief (ulga na powrót). This relief provides a partial exemption from income tax for a defined period following the transfer of residence to Poland.

The relief was introduced to encourage Poles returning from abroad as well as foreign nationals relocating to Poland for the first time. It covers both employment income and business income, subject to certain conditions regarding prior residency and absence from Poland.

Settlement Tax Relief resources

Other available reliefs that may apply alongside foreign income reporting include child relief (ulga prorodzinna), internet relief, rehabilitation relief and charitable donation deductions. Our goal is not only correct compliance but full use of every legally available tax preference.

Free tools

Use these free tools to check your situation before deciding whether you need professional help.

Free tool

Polish Tax Residency Test

Answer a short questionnaire and find out whether you qualified as a Polish tax resident in a given year.

Free calculator

Settlement Tax Relief Calculator

Check whether you qualify for ulga na powrót and estimate the tax benefit for your situation.

20. Practical examples

Example 1: Polish resident working for a UK-based company (remote)

An individual tax resident in Poland working remotely for a UK company that pays salary in GBP. If the work is physically performed in Poland, Poland generally has taxing rights over the salary. The income is declared on PIT-36 with PIT ZG. The proportional deduction method applies. If UK PAYE tax was deducted, it is credited against Polish tax within the proportional limit. If the UK employer operates through a Polish payroll, the settlement differs. The specific facts and applicable treaty provisions should always be verified.

Example 2: Polish resident owning a UK limited company

A resident taxpayer who is the sole director and shareholder of a UK Ltd. They pay themselves a salary and dividends. The salary may fall within the UK personal allowance and attract no UK tax. Under the proportional deduction method applicable to the UK, no UK tax to credit means full Polish tax exposure on the salary. Dividends are reported on PIT-38 at 19%; UK dividend withholding tax (if any) is credited proportionally. A common mistake is assuming zero UK tax means zero Polish obligation.

Example 3: Polish resident with a German employment contract

An individual tax resident in Poland working in Germany under a German employment contract and commutes or relocates periodically. German income is declared on PIT-36 with PIT ZG. The exemption-with-progression method applies. German income is not re-taxed in Poland but is added to Polish income for rate determination. If the taxpayer has no Polish income, the effective Polish tax on German income is zero. The most common error is not declaring the income at all on the assumption that German taxes paid are sufficient.

Example 4: Brokerage account at a foreign broker

An individual resident in Poland trading shares and ETFs through a foreign broker. The broker does not issue any Polish tax documents. The resident must extract the full transaction history, convert each transaction to PLN using the correct NBP rate, calculate gains and losses by instrument, and file PIT-38 with PIT ZG for each source country. Dividends are also reported on PIT-38. The absence of a Polish form from the broker is not a defence against the obligation.

For situations involving multiple countries, income types or treaty methods, see the complete tax return service.

21. Common mistakes taxpayers make

These are the errors we encounter most frequently when reviewing unfiled or incorrectly filed returns. They are not obscure edge cases, they affect a significant proportion of individuals with foreign income.

  • Assuming tax paid abroad ends the matter. The most widespread mistake. Paying income tax in Germany, the UK or any other country does not discharge the Polish reporting obligation. The treaty method determines how the two taxes interact, it does not eliminate the requirement to declare.
  • Using the wrong NBP exchange rate. The correct rate is the NBP average rate from the business day preceding the income date. Using the rate on the income date itself, or a monthly average, is incorrect. On accounts with many transactions the error compounds.
  • Omitting PIT ZG. Many self-filers complete PIT-36 or PIT-38 but forget the PIT ZG attachment. Without it the return is technically incomplete and the treaty credit or exemption cannot be applied correctly.
  • Ignoring dividend income from foreign brokers. Dividends credited to a foreign brokerage account are taxable in Poland even if they are automatically reinvested. They are separately reportable from capital gains.
  • Confusing tax residency with visa status or registration. Tax residency is determined by factual ties, not by whether you have a visa, a PESEL number, or are registered as a resident. Many individuals are Polish tax residents without realising it, or believe they are not residents when they are.
  • Treating RSU income entirely as capital gains. The benefit at vesting is typically employment or other income (PIT-36), not capital gains (PIT-38). Reporting everything on PIT-38 understates income tax and can lead to a significant underpayment.
  • Assuming the UAE is a no-treaty country. Poland has a double tax treaty with the UAE. The issue is not the absence of a treaty, it is that UAE income is tax-free at source, leaving no foreign tax to credit under the proportional deduction method.

22. Compliance checklist

  • Confirm Polish tax residency status for the relevant year using the centre-of-vital-interests and 183-day tests.
  • Collect all foreign income documents: employment payslips and P60/annual statements, rental income records, brokerage account history, dividend statements.
  • Identify the applicable bilateral double tax treaty for each country of income source.
  • Determine the correct treaty method (exemption with progression or proportional deduction) for each income category.
  • Convert all income amounts to PLN using the NBP average rate from the business day preceding the income receipt date.
  • File PIT-36 (with PIT ZG) for employment, rental and business income from foreign sources.
  • File PIT-38 (with PIT ZG) for capital gains, dividends and investment income from foreign sources.
  • Check eligibility for Settlement Tax Relief and other available deductions.
  • Pay any remaining tax liability by 30 April.

23. What if you did not report foreign income in previous years?

This is one of the most common situations we encounter. A person lived in Poland for several years, earned income abroad, and either did not know about the reporting obligation or assumed that paying tax abroad was sufficient. Now they want to regularise their situation.

The good news is that this can be corrected. Polish tax law allows taxpayers to file amended returns (korekta zeznania) for prior years. There is no obligation to wait for the tax office to act first, proactive correction is both legally possible and generally viewed more favourably than a correction triggered by a tax audit.

Statute of limitations

The general rule under Polish tax law is that tax liabilities expire after five years from the end of the calendar year in which the tax payment deadline fell. For income earned in 2020, settled by 30 April 2021, the liability expires at the end of 2026. In practice this means you can typically correct returns going back five tax years.

Interest on late payment

Filing a corrected return does not eliminate the interest that has accrued on any underpaid tax. Default interest (odsetki za zwłokę) is currently calculated at 8% per annum (subject to change). However, filing a voluntary correction before any official audit or inquiry can reduce the interest rate to a lower preferential rate and avoids the risk of penalty surcharges (dodatkowe zobowiązanie podatkowe) of 20–150% of the unpaid amount.

What a correction involves

Correcting prior-year returns requires reconstructing the income figures for each relevant year, applying the correct NBP exchange rates at the time, determining the applicable treaty method and recalculating the tax. For investment income it also requires retrieving historical brokerage data which brokers may only retain for a limited period. Acting promptly is therefore important.

Voluntary disclosure vs audit

Submitting a voluntary correction before the tax office initiates any proceedings significantly improves the taxpayer's position. It eliminates the risk of a formal tax determination, limits exposure to penalty surcharges and demonstrates good faith. Once a tax audit (kontrola podatkowa) or tax proceedings (postępowanie podatkowe) have been opened, the ability to file a self-correction is suspended.

Need to correct prior years?

We assess the exposure, identify which years require correction, and manage the full process from document collection to filing.

See the service

24. When you probably do not need to file in Poland

This handbook focuses on obligations that exist. It is equally useful to be clear about situations where the Polish filing obligation does not arise, because misunderstanding this can cause unnecessary anxiety or unnecessary filings.

  • You were not a Polish tax resident in that year. If you did not meet either the centre-of-vital-interests test or the 183-day test for a given calendar year, Poland has no right to tax your worldwide income for that year. Only Polish-source income (if any) would be relevant.
  • You had no income in that year. If you genuinely had no income from any source, Polish or foreign, there is no tax return obligation. Note that certain capital events (e.g. share sales at a loss) may still require reporting even without a profit.
  • Your only Polish income was from an employer who settled PIT-11. If you had only Polish employment income and no foreign income, your employer's PIT-11 is likely sufficient and you may not need to file separately, subject to standard rules about joint filing, reliefs etc.
  • Income arose in a year before Polish residency. Income earned while you were a non-resident, before you moved to Poland and acquired Polish tax residency, is not subject to Polish tax, even if you now live in Poland.

Verify before assuming

None of the above excuses apply automatically. If you are unsure whether you held Polish tax residency in a given year, use the Polish Tax Residency Test before drawing conclusions.

25. Frequently asked questions

If I paid tax abroad, do I still have to file in Poland?

Yes. Paying tax abroad does not eliminate the obligation to disclose the income in your Polish annual tax return. Depending on the treaty method the income may be exempt in Poland (exemption with progression) or taxed with a credit for foreign tax paid (proportional deduction). The obligation to report always exists regardless of the method.

If no tax was paid abroad, does that mean no Polish tax?

No. Under the proportional deduction method, the absence of foreign tax means there is nothing to credit against Polish tax. The full Polish tax rate applies. This is particularly relevant for income received from companies in low-tax jurisdictions or where income falls within a foreign personal allowance.

Can the Polish tax office access my foreign bank account information?

Yes. Poland participates in CRS (Common Reporting Standard) with all EU countries and many other jurisdictions. Financial institutions in participating countries automatically report account data to their local tax authority, which shares it with Poland. You should assume this exchange takes place as a matter of course.

Which form do I use to report foreign income in Poland?

Employment, rental and business income from foreign sources is reported on PIT-36 with PIT ZG attached for each source country. Capital gains, dividends and investment income from foreign sources is reported on PIT-38, also with PIT ZG. A separate PIT ZG is required for each country.

My foreign broker does not send me any Polish tax document. Do I still need to report?

Yes. The reporting obligation arises from Polish law, not from any document the broker provides. You must extract the transaction history from your broker account, perform the PLN conversion and calculate the gains yourself. This applies to Interactive Brokers, Revolut, Trading 212, Degiro, Saxo, Schwab and all other non-Polish brokers.

What exchange rate do I use to convert foreign income?

The NBP (National Bank of Poland) average exchange rate published on the business day preceding the date the income was received. For brokerage transactions, use the rate from the business day before the settlement date of each transaction. NBP rate tables are published daily on the NBP website.

I received RSU shares from my foreign employer. Do I need to report this in Poland?

Yes. RSU income is generally recognised at vesting, when the shares are transferred to you. The market value of the shares on the vesting date is typically treated as employment or other income and declared on PIT-36 at progressive rates (12%/32%). When you subsequently sell the shares, any further gain is capital gains income declared on PIT-38 at 19%. The cost base for the sale is the value already taxed at vesting. Incorrect classification of the full gain as PIT-38 only is a common error.

I did not report foreign income in previous years. Can I still correct this?

Yes. Polish tax law allows you to file amended returns (korekta zeznania) for prior years within the statute of limitations, generally five years from the end of the year in which the tax was due. Voluntary correction before any audit or official inquiry reduces interest exposure and avoids penalty surcharges. Once the tax office opens formal proceedings, the ability to self-correct is suspended.

I work for a UAE company, do I pay tax in Poland?

If you are a Polish tax resident, yes. Poland has a double tax treaty with the UAE which provides for the proportional deduction method. Tax paid in the UAE is creditable in Poland up to the proportional limit. However, because the UAE does not levy personal income tax, there is typically no UAE tax to credit. The result is that the full Polish progressive rate applies to the income. The treaty does not eliminate the liability, it only provides a credit mechanism that is effectively unused when the source-country tax is zero.

What is the filing deadline for a Polish tax return with foreign income?

30 April of the year following the tax year. For 2025 income the deadline is 30 April 2026. Returns with foreign income require additional preparation time. Do not leave it to the final days.

26. How Sarego Finance can help

Not sure where to start? Our main personal tax page gives an overview of all services for individuals: Personal tax services, Sarego Finance.

We specialise in cross-border tax compliance for individuals living in Poland with foreign income. Our services include:

  • Complete annual tax settlement: PIT-36 and/or PIT-38 with PIT ZG for all countries, all income types, all treaty methods, and all available reliefs. See the full service at Tax returns for individuals in Poland.
  • Capital gains settlement: PIT-38 for Polish and foreign investments including shares, ETFs, investment funds, structured products and cryptocurrency. Details at PIT-38 capital gains service.
  • Settlement Tax Relief (ulga na powrót): eligibility assessment and application for individuals who have recently moved to Poland. Details and calculator at Settlement Tax Relief guide.
  • Inheritance tax declarations: for assets located in Poland including real estate, shares and other property rights, also for non-residents. See Inheritance in Poland.

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Jerzy Gaweł, licensed Polish tax advisor at Sarego Finance
Jerzy Gaweł

Licensed Tax Advisor · Partner, Sarego Finance

Jerzy specialises in cross-border tax compliance, reporting foreign income in Poland and annual settlements for individuals with international tax exposure. He advises expats, foreign executives and non-resident investors on Polish income tax, double tax treaties and available reliefs.

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