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What Are the Tax Implications for Indian Expats Working in Poland?

What Are the Tax Implications for Indian Expats Working in Poland?

27 May 2025


In recent years, Poland has emerged as a popular European destination for Indian professionals, students, and skilled workers. This growing Indian diaspora contributes to Poland's workforce and economy while maintaining strong financial ties with family back home in India. One critical aspect that Indian expats must understand while living and working abroad is taxation. Knowing how the Polish tax system applies to foreign workers helps avoid legal issues and ensures financial stability. Whether you send money to India from Poland or file annual taxes, a reliable partner like ACE Money Transfer can simplify your remittance needs while keeping your finances in check.
 

Understanding the Polish Tax System

Before diving into the specifics for Indian expats, it’s crucial to understand the basics of how Poland's tax system operates. Poland follows a structured income tax system that applies to residents and non-residents differently.
 

Basic Structure of the Polish Taxation System

Poland primarily uses Personal Income Tax (PIT) to tax individuals. The tax system operates on two main income brackets:

  • 12% for annual income up to PLN 120,000
  • 32% for income above this threshold

Some professionals, such as freelancers and self-employed individuals, may opt for a flat tax rate, depending on their income source and profession. Poland also offers a simplified tax regime for certain industries, but this must be opted for and reported accurately.

 

Tax Residency Criteria in Poland

Poland uses the 183-day rule to determine tax residency. If an individual stays in Poland for more than 183 days in a calendar year or has their centre of vital interest (family, property, or economic ties) in Poland, they are considered tax residents.

  • Tax Residents are taxed on worldwide income
  • Non-residents are taxed only on income earned in Poland

For Indian expats, this means that once you cross the 183-day threshold, you may need to declare global income, including rent, dividends, or investments from India.
 

Income Tax Obligations for Indian Expats in Poland

Indian expats working in Poland must comply with Polish tax laws just like local citizens. Your employment status, type of income, and duration of stay all determine your obligations.

 

Tax on Employment Income

Your employer is responsible for withholding taxes from your monthly salary and submitting them to the Polish tax office (Urząd Skarbowy). These deductions include income tax and social security. At the end of the fiscal year, you’re required to report your annual income through tax filing. Monthly pay slips and the PIT-11 form (issued by employers) serve as crucial documents for annual reporting.
 

Taxation on Foreign Income

If you are a Polish tax resident, any income earned in India (e.g., rent from property or dividend earnings) may be taxable in Poland. You are required to report such foreign income in your annual tax return, even if it’s already taxed in India. However, the Double Taxation Avoidance Agreement (DTA) between India and Poland helps avoid paying tax twice on the same income (explained later).

 

Social Security Contributions

Expats working in Poland typically contribute to the ZUS (Zakład Ubezpieczeń Społecznych) social security system. These contributions cover healthcare, retirement, and unemployment benefits. Contribution rates are:

  • Pension insurance: ~19.52%
  • Health insurance: ~9%
  • Other minor contributions

In some cases, Indian expats may be exempted from paying social security if there's a bilateral social security agreement between India and Poland or if the employee is on a short-term assignment.

 

Double Taxation Agreement (DTA) Between India and Poland

To protect expats from paying taxes in both countries, India and Poland have signed a Double Taxation Avoidance Agreement. This agreement ensures income is not taxed twice and outlines mechanisms for relief.
 

Overview of the DTA

The primary purpose of the DTA is to prevent double taxation of income earned by residents of either country. This is especially useful for Indian expats earning income both in India and Poland.

 

Relief Mechanisms for Double Taxation

Two main relief methods apply:

  • Exemption Method: Income taxed in one country is exempt in the other.
  • Credit Method: Taxes paid in India are credited against your Polish tax liability.

To claim relief, you must submit:

  • Tax residency certificate from India
  • Form 10F
  • Proof of income and tax paid in India

These documents should be submitted during your Polish tax filing process.

 

Filing Tax Returns in Poland as an Expat

Even if your employer withholds taxes, filing a tax return is mandatory for residents and beneficial for those seeking refunds or deductions.

 

Annual Tax Filing Deadline

The deadline for filing taxes in Poland is typically April 30th for the previous calendar year. Tax returns can be submitted via:

  • Online e-Deklaracje platform
  • In person at a local tax office
  • By mail

The tax office will assess your return and notify you of any refunds or further payments.
 

Necessary Documents and Forms

Common tax forms include:

  • PIT-11 – Provided by your employer
  • PIT-36 or PIT-37 – Main tax return forms
  • Statements of foreign income, if applicable

Ensure you collect all income statements before the filing season begins.

 

Language Barriers and Professional Help

Navigating tax documents in Polish can be difficult. Fortunately, many English-speaking tax consultants offer affordable services for expats. Additionally, some Polish government offices provide limited support in English or have translated guidelines to assist foreign nationals.

 

Key Tax Deductions and Exemptions Available

Indian expats may benefit from several tax deductions that reduce overall taxable income.
 

Common Deductions for Expats

Expats can claim deductions for:

  • Housing expenses (rent or mortgage interest)
  • Dependent support (children, spouse)
  • Work-related travel or relocation costs

These deductions must be documented and included in your annual return.

 

Special Allowances for Foreign Workers

Temporary foreign workers may qualify for special allowances or relief schemes under local or EU tax laws. Some allowances also apply to specific job categories or short-term assignments.
 

Penalties for Non-Compliance

Failure to comply with Polish tax laws can lead to serious consequences.

 

Consequences of Late or False Tax Filing

Penalties may include:

  • Late filing fees
  • Interest on unpaid taxes
  • Legal action for deliberate tax evasion or underreporting

In severe cases, it could affect your immigration status.
 

How to Rectify Filing Errors?

If you’ve made a mistake, you can submit an amended return. This is done by refiling the correct form and informing the Polish tax authorities (Urząd Skarbowy). It's always better to correct errors voluntarily before they are discovered during an audit.
 

Repatriating Money to India – Tax Implications

Sending money to India from Poland is a common practice among Indian expats. But is it taxable?
 

Is Money Sent to India Taxable?

If the income has already been taxed in Poland and is being sent to India for personal use, it is not subject to additional tax in India. However, high-value remittances may be scrutinised under India’s LRS (Liberalised Remittance Scheme) regulations, though that mainly applies to residents sending funds out of India.

 

Using Legal Channels for Remittances

Always use regulated and licensed money transfer services like ACE Money Transfer. Not only does it guarantee safety and compliance, but it also helps maintain documented proof of remittances, which may be useful during tax filing in either country.
 

Role of ACE Money Transfer for Indian Expats

ACE Money Transfer isn’t just a money-sending platform—it’s your financial companion abroad.
 

Reliable and Secure Transfers to India

With competitive exchange rates, low fees, and fast transactions, ACE ensures your hard-earned money reaches your loved ones efficiently. Their robust security features protect against fraud and delays.
 

Helping You Stay Compliant

ACE provides digital transaction records, which can serve as proof of income and remittance history for tax purposes. This simplifies filing and adds transparency to your financial trail. ACE Money Transfer is rated 4.7 out of 5 on Trustpilot with over 129,000 reviews — a testament to their commitment to excellent service.
 

Stay Tax-Savvy While Working in Poland

Understanding taxation is vital for Indian expats working in Poland. From income tax and social contributions to the DTA and remittance implications, staying compliant helps you avoid penalties and financial headaches. Leveraging trusted services like ACE Money Transfer makes money transfer from Poland to India safe, fast, and transparent, supporting both your financial goals and peace of mind.


 

FAQs

Do I need to pay taxes in both India and Poland as an Indian expat?

No, the DTA between India and Poland helps avoid double taxation through specific relief mechanisms.
 

What is the tax rate applicable to Indian expats working in Poland?

The tax rate can vary from 12% to 32%, depending on your income and residency status.
 

Is money transferred to India from Poland taxable?

If your income is already taxed in Poland, remittances are generally not taxed again in India under personal capacity.
 

How can I claim double taxation relief in Poland?

You need to provide documentation such as tax residency certificates, Form 10F, and income proof from India.

 

Can ACE Money Transfer help me maintain proper remittance records for tax purposes?

Yes, ACE provides digital transaction histories and receipts that you can use as supporting documents during tax filing.


 


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