Poland

A company is considered to be a resident in Poland if its registered office or management is located in Poland.

As of 1 January 2022, it is understood that the taxpayer has a management board in the territory of Poland, inter alia, when in the territory of Poland current activities of that taxpayer are conducted in an organised and continuous manner, in particular on the basis of: an agreement, decision, court judgment or other document regulating the establishment or functioning of this taxpayer, or granted powers of attorney, or connections between related entities.

Permanent establishment (PE)

PE under Polish CIT law

According to the Polish CIT Act, definition of 'permanent establishment' covers:

• a fixed place of business through which the entity, whose seat or management office is on the territory of one state, pursues its activities, in whole or in part, within the territory of another state, in particular a branch, agency, office, factory, workshop, or place of extraction of natural resources (fixed place of business concept)
• a construction site, construction, assembly, or installation work carried on within the territory of one state by the subject, whose seat or management office is on the territory of another state (construction site concept), and
• a person who, on behalf and for the benefit of a subject, whose seat or management office is on the territory of one state, operates on the territory of another state, provided such person holds and exercises a power of attorney to enter into contracts on its behalf (dependent agent concept),

unless a relevant DTT to which Poland is a party provides otherwise.

Note that Polish CIT law:

• does not encompass any provisions concerning the period required for construction works to create a PE
• does not include provisions indicating that an independent agent does not create a PE, and
• does not include provisions indicating that actions of an auxiliary or preparatory character do not lead to creation of a PE in Poland.

The above-mentioned standard PE existence triggers should be interpreted taking into account wording of a specific DTT, the provisions of the Organisation for Economic Co-operation and Development (OECD) Commentary, and international practice.

PE from a DTT perspective

In general, the provisions of DTTs concluded by Poland are based on the OECD Model Tax Convention on Income and on Capital (OECD Model), except for provisions related to taxation of royalties, which are based on the United Nations (UN) Model Double Taxation Convention.

Under standard DTTs based on the OECD Model, PE in Poland may be triggered by a foreign entity having:

• a fixed place of business through which the business of the enterprise is wholly or partially carried on
• a dependent agent, or
• a building site, construction, assembly, or installation, or a supervisory or consultancy activity connected therewith.

Note that some DTTs concluded by Poland also encompass other PE concepts (e.g. service PE concept or offshore PE concept).