British In Poland

I have now moved the British in Poland blog to its own website at http://www.britishinpoland.com/

Here's why if you're interested.

All existing articles and nearly all comments have been moved across there. New articles will only be published at http://www.britishinpoland.com/

Please can you update your bookmarks/favourites/any links you might have to point to my new site.

I will keep this space at blogspot.com running for the next few months or so so that people can find my new blog but this site won't be updated any more.

Thanks.

Ben

For whatever reason you may decide to trade through your own company in Poland. Therefore you want to start a Polish company. Just like in the UK there are different types of company including:

• spólka z. o. o. (z ograniczoną odpowiadzalnością) - private limited company (a UK ltd company). You have to draw up documents at a notary and have at least a bond capital of 50 000 PLN.
• spólka akcyna - public company - (a UK plc). No idea what the process is here but I guess if you were interested in opening an S.A. you would be talking to an accountant and not reading some guy's Blog on the Internet..
  
• działalność jako osoba fizyczna (self-employed) - the simplest way to start!
  

The simplest method to start trading is to therefore go self-employed. This blog post describes the steps to do that.


Things to do before you start:

1. NIP-4: If you haven't got a NIP tax number already, go to the Urząd Skarbowy and fill out the form for a NIP-4. It's straight-forward and you will get the NIP number by post a few days later
   
2. PESEL: In theory anyone including foreigners (who might not yet have a Pesel) can register a company, but I don't know what extra hassles you might have if you don't have a Pesel. When I started my company they wanted the Pesel in steps 1 and 2 below so I guess it's better to have it. If you don't already have a Pesel then see here: how to get a Pesel
3. PKD code: for the Central Statistics Office (GUS - Głowny Urząd Statystyczny) you have to tell them what the nature of your business will be. There are codes for various categories and you have to pick one. For example code 62.01.Z is software development, code 85.49.A is teaching foreign languages. These codes are called PKD codes - Polska Klasyfikacja Działalnośći - Polish activity classifications. At this stage you should therefore look up what codes you want to use. A new list was published in 2007 so make sure you use the PKD 2007 list and not an older one. I used this website to find my codes: PKD codes. Also another tip is that it's better to put too many codes rather than have to add a code later because each change incurs a fee. So if you think there's a chance you might venture into other fields at a later stage then it will do no harm to add the code for it.
   

Now you're ready:

1. Wpis do ewidencji - first job is to go to the Urząd Miasta where you live and ask to do a 'wpis do ewidencji'. Basically this is just an entry to their register of your business. You have to fill out a form and pay a fee which varies from office to office. I paid 100 PLN. When I did it the guy was very helpful and showed me exactly how to fill out the form. I checked my PKD codes in the book they had and also had to choose a date when the company officially starts. Here is the next tip - choose the 1st of the month - it will make life simpler later on. Depending on how efficient the office is you will get a confirmation of your wpis do ewidencji a few days later in the post. I have heard that sometimes it takes a couple of weeks though. Another point worth mentioning is that a company name is optional - you can either specifiy a name such as "Green Widgets" or you can leave the name blank in which case you will trade under your own name, e.g. "John Smith".
   
2. REGON - next job is to fill out form RG-1 from GUS (see above) to get your REGON number. This is where you need your PKD codes (although I also had to supply a code when I did the wpis do ewidencji). In the old days you would have to go to your nearest GUS office to do this but in a refreshing drive of efficiency you can now do this online via their website (link above). Even more efficiently (and suprisingly!) the guy asked if I wanted to do this with him when I did the wpis do ewidencji! Great - two jobs done at once!
3. Bank account - my understanding is that your company is required to have its own bank account. I didn't check this though so I may be mistaken. In any case once you have your REGON and Wpis it's very simple to open a bank account for your company. According to the mBank.pl website you just need some ID, regon and wpis.
4. NIP-A - presuming you already have a NIP-4 from earlier, you now need to go back to the Urząd Skarbowy and do an update - aktualizacja - on it. This is form NIP-A. At this stage you have to choose which tax scheme you want. There are a few choices which I shall outline below.
5. ZUS - you have until 7 days after the date your company officially starts (the date you gave in step 1) to register your company with ZUS so that you can make social insurance payments. You have to fill out form ZUS ZFA to register your company as an employer to open an employer account (konto płatnik). You will also need to fill out form ZUS ZUA to register yourself as an employee. Again you need the proof of your wpis to do this. They ask you for your REGON but you can always provide that later if you are still waiting for it. You can find instructions in English and German about how to fill out all of their forms here: ZUS
   

Choosing a tax scheme:

As mentioned in step 4 when you do your NIP-A you need to choose which tax scheme you want to operate under. You can choose from:

• zasady ogólne - "general rules" - this is the default option
• ryczałt
• karta podatkowa

At the time of writing I haven't had a chance to read up too much on these so I apologise that the info here is a little scant. If it helps there is some info in Polish here and also here. The pros and cons of these schemes include things such as paying a flat rate of 19% tax, not being required to keep a record of accounts, being able to split your tax burden with your spouse etc.. etc..

Also I haven't mentioned here about registering for VAT which is a requirement if your income will exceed 20 000 EUR in a year.

But I hope the information I have given is useful and will help get you started. If anyone has any feedback, corrections, experiences, more info etc.. then as always please let me know.

Good luck

I have a UK company which I ran before I moved to Poland. Having now lived in Poland for a while I figured that I should do something about my residency situation as per my last blog post about Polish residency.

Therefore I spent a long time on the phone to the Inland Revenue back in the UK, and made a couple of visits to ZUS and the Urząd Skarbowy here in Poland.

I decided that I would continue to pay myself from my UK company but I would become a Polish resident employee.

The Inland Revenue said that I could continue to put myself through my pay roll if I wanted (Class X for National Insurance and tax group NT) or I could just take money out of the company against an invoice.

Polish Social Insurance - ZUS

ZUS said that I needed to register my UK company as an employer in Poland and open an "employer account" called a konto płatnik to make social insurance payments. The alternative was to pay the employee (i.e. myself) gross, and have the employee sign a declaration that the employee has the responsibility of paying both the employer's and employee's social insurance payments.

Option 1 - konto płatnik - to do this you have to fill out form ZUS ZPA. But to do that you need a tax number (NIP) from the Urząd Skarbowy. To get the NIP you have to fill out form NIP-2. But because your company is foreign you have to apply directly to Warsaw and enclose certain documentation:
* company documents (such as formation certificate)
* translations by a sworn translator of these documents
* declaration (in Polish) that you are not supplying bank account details becase you do not wish to make use of Polish VAT returns

The Warsaw address for a NIP-2 for a foreign company is:
Drugi Urząd Skarbowy Warszawa Śródmieście
ul. Jagiellońska 15
03-719

Telephone +48 (0)22 5845100 or 831 9194 or 831 9195
There is information about this in English and German on the zus website.

Option 2 - employee pays both employer's and employee's ZUS:
The employee and employer should sign an agreement that the employee takes the responsibility of paying the employer's side of the social insurance payments.
In Polish this is called:
"umowa z pracownikiem o przyjęciu roli płatnika z przedsiebiorstwem nie mającym oddziału w Polsce".

Polish tax - Urząd Skarbowy

This side seems simpler. My understand from what they told me is that my company simply pays the employee a gross salary and the tax bill is determined the following year. Not like the more complicated PAYE system in the UK with different tax codes etc..!
The Polish system is that in February 2009 the employer fills out a PIT-11 form for each employee which shows how much that employee was paid for the 2008 year. The employee then has until April 2009 to pay his/her tax bill.

After going through all this information I decided not to use my UK company to do this afterall - I figured that if the ZUS was going to be hassle then it would be simpler to just open a new company in Poland and have that company pay my ZUS. My Polish company can simply invoice my UK company as necessary to move funds.

My next blog post will be about how to set up a Polish company.

Residency for tax purposes

It's important to determine whether you are Polish or UK resident because that will determine where your taxes are due and whose health insurance system you fall under. The rule of thumb is that if you are in an EU country for 6 months or more then you are resident there.

If you are UK resident then:
* you continue to pay your taxes in the UK
* you pay national insurance in the UK
* you can get a European Health Insurance Card from the NHS to cover medical bills in Poland

If you are resident in Poland then:
* you will now fall under the Polish tax system. The tax bands are lower than those in the UK and your GLOBAL INCOME is taxable, NOT JUST MONEY YOU EARN IN POLAND!
* you will pay social insurance to ZUS
* ZUS can give you a European Health Insurance Card which you should use when you are back in the UK

What happens if I move to Poland?

In theory when you decide you are 'resident' in Poland you should inform the authorities accordingly. That means you tell the Inland Revenue you have left the UK and they will calculate whether they owe you any tax back or not. If you start working for a Polish company then they will sort out your tax and ZUS for you. If you were self-employed in the UK then you need to talk to an accountant. You may decide to open a new Polish company, or you may decide to register your UK company as an employer in Poland so that it can pay social insurance for you.

What happens if I work in the UK during the week but return to Poland at the weekends?

In situations such as this it comes down to defining your 'place of living'. If you stay in hotels during the week but your house is in Poland that's one point for Poland. If your family (spouse, kids etc..) live in Poland that's another point for Poland. If you spend your spare time in Poland, again that counts as living in Poland. If you think your situation is arguable then you can ask the Polish tax office (Urząd Skarbowy) to make a ruling. An application for a ruling is free of charge. You describe your situation and put your point of view in it. They have 3 months to rule. If they don't rule within this time then your point of view prevails and is binding for all tax offices in Poland.

What happens if I don't become resident in Poland?

Probably nothing for a while. But you might get a knock on the door one day from the tax office. You run the risk that they will rule you as a Polish resident and give you a backdated tax bill for your global income. Having said that, Poland has tax agreements with most countries so that you are not charged twice for tax. But I don't know if there are any penalties involved or if there would be a tax bill still due to differences in tax bands etc.. If this has happend to anyone I would be keen to hear about it!