Each entrepreneur, whether domestic or foreign, will come, eventually, in contact with the main business authorities in Poland. It is inevitable. Never mind, if they are “friendly” contacts, but if you get on the wrong foot with them… It’s better to prepare yourself. Let me show you how to get ready for the big moment and what to do to avoid trouble.
Business authorities – the big three
(Social Insurance Institution), responsible for social insurance matters, such as
- establishing entitlement to social insurance benefits,
- paying out social insurance benefits,
Under the Union law, as an employee or a self-employed person in a Member State, you are subject to the legislation of that Member State. This is the principle of the so-called workplace.
You are not obliged to register in the Polish insurance system if you do business in your country and provide services in Poland only temporarily (up to 24 months).
If you live in a country outside the EU and want to do business in Poland, you must take out insurance in Poland. However, there are exceptions to this principle under bilateral agreements that regulate insurance coverage. Currently, Poland is a party to agreements with Montenegro, Serbia, Bosnia and Herzegovina, Macedonia, Canada, the USA, South Korea, Australia, Ukraine and Moldova.
Important! Before establishing a company in Poland > contact the Social Insurance Institution both in your country and in Poland. If you are a non-EU citizen > check whether Poland has a bilateral social security agreement with your country.
The employer must register the employee with an insurance system within 7 days from signing an employment contract. The ZUS website is not very user-friendly, but the basic information is there, with some documents available for download.
(National Labour Inspectorate), responsible for labour-related matters, such as
- observance of labour law, in particular occupational safety and health rules, and legality of employment
- eliminating any irregularities, issuing warning notices and imposing fines
When posting workers to Poland, the employer must:
- appoint a person (living in Poland) representing the company before the National Labour Inspectorate, and to send and receive documents and notifications;
- keep the following documents (in electronic or paper form) in Poland:
- copy of the employment contract of the posted worker,
- timesheets of the posted worker, including start and finish time,
- salary slips of the posted worker with the amount(s) of wages paid and deductions made,
- proof of social security and health insurance coverage.
These documents must be available in Polish upon request within 5 days during the posting period.
- file with the National Labour Inspectorate a “Posted Worker Declaration”. The document must provide the details of the foreign employer, the posted employees, and the conditions of their posting. The declaration can be submitted on-line, in person or by post.
Important! Failure to comply with any aspect of the Posted Worker Rules can cause significant financial penalties and elimination of future postings.
First Mazovian Tax Office – serves foreign companies, branches and representative offices
Third Mazovian Tax Office – serves foreign natural persons
Tax inspections that focus on any tax-related aspects are usually announced in advance. They may start not earlier than seven days and not later than 30 days from the receipt of the inspection notice. Otherwise, a new document must be served to commence the inspection.
Areas of Tax Office interest
- VAT payments, especially resulting from a “unified control file” (in Polish: Jednolity Plik Kontrolny, or JPK). The file is submitted by each VAT taxpayer and it provides basic data on VAT transactions in the settlement period.
- Tax losses in recent years
- Taxes such as corporate income tax, VAT and excise duty
- Transfer pricing, tax optimization structures, intra-Community transactions and the reverse charge mechanism
Steps to take to avoid trouble
Clarify future transactions – if you have any tax-related doubts about a transaction, ask for an individual interpretation from the Tax Office. In Poland, tax opinion protects against additional liability or initiation of fiscal proceedings.
Establish formal procedures – instruct and train your employees on how to handle tax inspections. They should know what documents to present to inspects, or how to handle their queries. The formal procedure will reduce inspection-related stress and provide the employees with guidance on how to react.
Other business authorities
(National Revenue Administration), a merger of tax administration, fiscal control and customs service, responsible for
- handling large taxpayers
- providing uniform tax and customs information
- combatting tax crime (including VAT fraud)
In Poland, some tax inspections, especially customs-related, may be conducted without an order, but based on an inspection notice. Sometimes, the inspection will serve the document in person and start the control immediately. This is because customs inspections usually concentrate on tax and customs offences, where it is necessary to act quickly.
(Office for Foreigners), provides social help and medical care during the migration process. It offers help both to refugees and foreigners in general. The office provides comprehensive information on the procedures related to getting a work permit, residence permit and other.
Business authorities in Poland, just as in other countries, require entrepreneurs to respect the laws and regulations. Their main task is to execute compliance and impose penalties, if necessary. Most of the websites of large business authorities are available in English, both for telephone and email contact. They also often have branches and offices throughout the country.
Contact me if you need help in translating documents or during a meeting with a government official. You will need a reliable translator to handle the documents and administrative requests. I will help you overcome linguistic barriers so that your company and brand can keep growing in Poland.