Cross-Border Remote Work FAQs Poland

Assume that a foreign national employee of a foreign company wishes to work remotely for a period of time in your country performing services exclusively for the foreign company and not interacting with the local market in your country.

Work authorisation

A. Is work authorisation required? If so, please provide a brief description of the type of visa, procedure, processing time, etc.

European Union citizens are not required to obtain any documents before they can begin to work in Poland. If the stay exceeds 3 months, the foreigner (not the employer) is only obliged to register their stay at the nearest Voivodeship Office (regional administrative divisions with authority over all matters related to the legalisation of the stay of foreigners in the Republic of Poland, matters of the residence of EU citizens and their family members, and where the registration of invitations and granting permits for foreigners to perform work, can be arranged).

With respect to the employment of a non-EU national by an employer that does not have a registered seat in Poland, and where such work is not connected to the Polish economy, a work permit is not required provided that the activities are performed on an occasional and incidental basis for a foreign entity.

This exemption applies where the activities carried out by the foreign national have no connection to the Polish labour market or economy, and where the individual is present in the territory of the Republic of Poland for purposes other than performing such activities. In particular, this applies where the activities are not intended to constitute the provision of services by the foreign entity from or within the territory of Poland, and where their performance is not directly or indirectly organised by that foreign entity.

In cases that do not fall within the above-mentioned category foreigners who are not citizens of the European Union, are required (with some exceptions) to obtain documents legalising their work and stay.

In a typical case, the foreigner must obtain a work permit before starting work in Poland. The processing time is approximately 3 months and is initiated by the employer.

Most important of all, is that the foreigner must secure the legal right to stay in Poland (e.g. visa, residence permit or visa-free stay permit, depending on the particular circumstances). As a rule, a residence permit can be obtained on the basis of a work permit or the above-mentioned declaration, unless the stay takes place as part of visa-free travel (then the employee must obtain the right to stay as part of visa-free travel, after 90 days of stay).

Risk of "permanent establishment"

B. Is there risk of "permanent establishment" consequences for the foreign company by virtue of the remote worker’s activities?  If so, what are the main factors determining the exposure.

Any response to this question should be assessed on a case-by-case basis in consultation with a tax law specialist. There is a potential risk of a permanent establishment being deemed to arise where an employee performs work remotely from the territory of Poland. However, such an assessment requires a detailed analysis of the nature of the working relationship, the manner in which the work is performed, the type of activities undertaken, and the overall organisational framework governing how the work is carried out in Poland.

Local social security and other payroll requirements

C. At what point and under what circumstances would the remote worker become subject to local social security and other payroll requirements?  Can such requirements be fulfilled by a foreign company, and if so by what mechanisms?

The general rule is that social security contributions should be paid in the country where the work is physically performed. Accordingly, if an employee works remotely from Poland, social security contributions should, as a rule, be paid in Poland.

This typically requires the foreign employer to register with the Polish social security institution as a contribution payer and to remit contributions on the employee’s remuneration. Where the foreign employer does not have a registered presence in Poland, it is also possible to require the employee to assume responsibility for paying contributions on behalf of the employer (pursuant to Article 21(2) of Regulation (EC) No 987/2009).

There are, however, exceptions to this rule. In certain circumstances, social security contributions may continue to be paid in another country despite the work being performed in Poland. This requires obtaining an A1 certificate by the employee or the employer. If such an A1 certificate is issued by another EU Member State, it is recognised by the Polish authorities and constitutes a valid basis for exemption from paying social security contributions in Poland.

If an employer is not from the EU, it should be verified whether an agreement between Poland and a given country, which regulates the rules on being subject to insurance, has been concluded. Poland has established bilateral social security agreements with e.g. the former Yugoslavia (now Serbia, Bosnia and Herzegovina and Montenegro), Macedonia, Canada, the United States of America, South Korea, Australia, Ukraine, Israel, Moldova, Turkey and Mongolia.

In the absence of a relevant bilateral agreement, non-EU nationals performing temporary remote work may be subject to an obligation to pay social security contributions on their remuneration, with the employer acting as the contribution payer.

Local employment law requirements

D. At what point and under what circumstances does the remote worker become subject to local employment law requirements such as is wage-hour, local holidays, annual leave, maternity leave, disability leave, protection against unfair dismissal, etc.

As long as the work is habitually performed in the home country and not in Poland, the Polish labour provisions will not apply.

The possibility that Polish law will apply depends on the particular facts concerned, e.g., if the work is performed habitually in Poland under the “Rome I” Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations).

The choice of law stipulated in an employment agreement may neither result in depriving the employee of the protections afforded to him under Polish law; nor can the parties, by agreement, deviate from such provisions; this means that an employee would be subject to the law chosen in the contract, unless Polish employment law provided him/her with better protection (e.g., working time norms, minimum wage, amount of days of annual leave, occupational health and safety regulations, etc.).

Remote foreign worker

E. Are there special requirements governing remote work in your country which would cover the remote foreign worker?

There are rules on remote work in Poland that apply to the employees whose employment relationship is regulated by the Polish Labour Code. However, as mentioned above, as long as the work is habitually performed in the home country, the provisions of the law regarding remote work, currently in force in the home country, should apply.

Income tax

F. What is the employee’s exposure to local income tax, and under what circumstances is the foreign employer required to arrange for withholding of income tax?

First of all, it has to be determined whether a particular person is a Polish tax resident, so if he or she:

• has a centre of personal or economic interests (centre of vital interests) on the territory of the Republic of Poland; or
• stays in the territory of the Republic of Poland for more than 183 days in a tax year.

As a rule, an employee temporarily working here will not be considered a Polish resident, and will be subject to tax only on income achieved in the territory of the Republic of Poland (limited tax obligation). Typically, in this case, a double tax treaty applies, which limits the obligation to pay income tax in Poland.

If no double tax treaty between Poland and a given country has been concluded, tax obligations will arise and the remote employee will have to register with the Polish Tax Authority (a foreign employer, as a rule, has no payroll withholding or reporting obligations in Poland).

Claim for workplace injury

G. Would the remote worker be entitled to bring a claim for workplace injury in your country?

In general, post-accident proceedings aimed at determining whether (or not) an accident at work has occurred, should be conducted in accordance with the regulations of the place where the employee usually works. As long as the work is habitually performed in the home country, and not in Poland, the Polish provisions in this matter are unlikely to be applied. In some cases, however, it cannot be ruled out that claims will be filed against the employer at the place of the accident, i.e., in Poland.

National healthcare system or insurance

H. Would the remote worker be covered under the local national healthcare system or insurance?

If an employee is covered by social insurance, he/she can also be covered by health insurance. In this case he/she is entitled to the same benefits as Polish employees.

If the stay of a remote employee insured in an EU country is temporary, she may receive necessary medical care by presenting the European Health Insurance Card. If an employee is a citizen of a country with which Poland has signed a treaty or bilateral agreement, the employee may also be entitled to receive the necessary medical care. In other cases, medical assistance is provided against payment.

Data privacy and security

I. Is a foreign employer subject to data privacy and security requirements regarding protection of employee personal information for a foreign employee working remotely in your country?

In the field of data protection in Poland, as in all European countries, the GDPR provisions apply. If the employer’s activity is conducted in the EU or is related to European citizens, the obligation to comply with the GDPR regulations arises. In case of the non-EU employer who has no connection to the European market, the GDPR may not apply.

Foreign remote worker

J. Has there been any litigation or specific law or regulation regarding the foreign remote worker in your country?

No, there has not been any significant litigation, legislation or directives specifically concerning foreign remote workers in Poland.

Citizenship

K. Would any of the above answers change if the remote worker (a) is a citizen of your country, or (b) engages in activity interacting with the local market?

a) If a remote employee is a Polish citizen, no work authorisation is required.

b) If the foreign worker is actively interacting with the Polish market and depending on the interaction, in certain situations, according to the principles of the Personal Income Tax Act, it may be that the foreign employer is deemed to have a permanent establishment in Poland; consequently, the foreign enterprise is will pay taxes on corporate income in Poland, in accordance with the Corporate Income Tax Act (CIT).