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Remote work (Home-Office) does not exclude the creation of a permanent establishment for tax purposes on the territory of Poland

Remote work doesn’t exclude the creation of a permanent establishment for tax purposes on the territory of Poland

Date30 Sep 2022

Nowadays, a flexible approach on working policies became one of the leading global trends on the job market. A growing number of employers have adopted the formula of remote work, more commonly referred to as: “home office”. This formula is also immensely popular among companies which recruit their employees abroad.

Other than the technical and operational challenges, an employer providing the possibility of remote work also has to take into account additional factors, for instance the tax implications of the remote working formula. Particularly in cases where job assignments are carried out from the employee’s domicile located on the territory of a foreign country.

The above-mentioned scenario entails the risk of creating a permanent establishment for tax purposes.

This was the view expressed, inter alia, in an individual interpretation issued by the Director of National Fiscal Information Service on 17th of February 2022 (ref. 0111-KDIB1-2.4010.655.2021.2.BD).

The factual data

The opinion on this particular subject was requested by a German consulting company which provides support to organisations with recruitment processes, as well as the development and procurement of staff at managerial levels. In addition to Germany-based personnel, the company also employs Polish citizens who have a permanent domicile in the Republic of Poland.

Their scope of duties mainly includes administrative activities such as cross border customer support, project management and business continuity services. The employees’ domicile in Poland was assigned as their workplace. However, it was neither mentioned as the registered office of the German company nor as a location for meetings with the company’s clients.

The claimant submitted a request to the National Fiscal Information Service (NFIS) for an interpretation to determine whether, considering the aforementioned circumstances, a permanent establishment of the German company comes into being on the territory of Poland, resulting in an updated obligation of the claimant to settle CIT on the Polish territory.

Simultaneously, the German company expressed the opinion that in its assessment, a permanent establishment hasn’t been created, justifying its position by the absence of a permanent office of the company on the Polish territory and characterising the employee assignments as only of an auxiliary and preparatory nature.


In the individual interpretation issued by the Director of NFIS, the position of the German company was deemed to be incorrect.

The Director refers in his opinion to the commentary included in the OECD Model Tax Convention (OECD MC), describing two key features of the permanent establishment: its’ permanence and the realization by its’ intermediation of the business activities which are neither solely preparatory nor auxiliary in nature.

The foundation of a permanent establishment, according to the commentary to the OECD MC, requires the cumulative fulfilment of three conditions:

  • the existence of a “place of business”: i.e., a facility such as premises where the business activity is conducted;
  • the permanent character of the establishment;
  • the provision by intermediation of the establishment of economic activity of the entrepreneur.

Based on the abovementioned guidelines as to the creation of an establishment, the existence of a geographical link between the establishment and a specific area, apartment, or a separated space, stays required, even if the employer does not command a legal title to such space.

Furthermore, according to the NIS, the activities carried out by the employees are of a regular and permanent nature, as evidenced by the provision of computer equipment to the permanent employees, so that the employee’s home becomes a permanent facility.

Based on the analysis of the facts presented by the claimant, the tax authority evidenced that the activities carried out by the Polish employees of the company weren’t only of an exclusively preparatory or auxiliary character. In fact, they perform assignments identical to those core operations of the German company.

The cumulative fulfilment of the three criteria of the commentary to the OECD Model Tax Convention is in accordance with the opinion of the Director of the NFIS a sufficient premise to conclude that a permanent establishment for tax purposes, and thus a tax obligation for the German company, arises on the territory of the Republic of Poland.


In conclusion, if the employees work remotely from their homes, and the tasks they are assigned to do not qualify as preparatory or auxiliary activities, there is a risk of creating a permanent establishment for tax purposes.

For the creation of an establishment to come into being it is therefore not at all necessary to neither utilize a separate, dedicated space such as a rented office nor having a legal title of ownership to these premises.

Similarly, the provision of computer or office equipment to the employees working remotely from their homes might entail the possibility of creating a permanent establishment.

For these reasons, foreign employers should continuously review the employment conditions and scope of operations of their employees working remotely in Poland or other countries. The same principle applies to those entrepreneurs who entrust work in ‘home office’ formula to foreigners or to foreign subcontractors.

Legal basis:

  • Act of 15 February 1992 on corporate income tax of legal persons CIT art. 4a point 11 (Journal of Laws of 2020, position 1406)
  • Agreement between the Republic of Poland and the Federal Republic of Germany for the avoidance of double taxation with respect to taxes on income and on property, signed in Berlin on 14th of May 2003, art. 5 (Journal of Laws of 2005 position 12, item 90)

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Elżbieta Naron

Head of Customer Relationships
Department / Senior Manager
getsix® Group
pl en de


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