Remote work from Poland and permanent establishment risk for foreign companies – Supreme Administrative Court of Poland (NSA) judgment

A permanent establishment in Poland is one of the key tax issues foreign companies should assess when hiring employees who work remotely from Poland. A judgment of 28 October 2025 issued by the Supreme Administrative Court of Poland (Naczelny Sąd Administracyjny, NSA) confirmed that an employee working from a private home in Poland does not, by itself, create a permanent establishment for a foreign employer. In the case at hand, the court concluded that this model did not automatically trigger Polish Corporate Income Tax (CIT) exposure for the foreign company.

For foreign entrepreneurs, this is an important and practical message. However, it does not mean that every remote working model is safe from a Polish tax perspective. The judgment confirms a taxpayer-friendly direction, but it also shows that the actual facts remain decisive. What matters is not the employee’s mere presence in Poland, but whether the foreign company has a fixed place of business at its disposal in Poland and whether business activity is actually carried on through that place.

What case did the Supreme Administrative Court of Poland decide?

The case concerned a German consulting company that employed staff in Poland to perform administrative and organisational tasks remotely. The employees worked from their own homes and used laptops provided by the company, but the company had no office, branch or real estate in Poland. Their duties were supportive rather than sales-oriented or managerial.

In those circumstances, the Polish tax authority argued that the employees’ homes constituted a fixed place of business of the foreign company in Poland. The administrative courts did not accept that position. The Supreme Administrative Court held that providing work equipment and allowing remote work was not enough to prove that the company had premises in Poland at its disposal.

Why an employee’s private home was not treated as a fixed place of business in Poland

The key issue was that the company had no legal or practical control over the employee’s home. It did not rent that space, manage it or treat it as its own business location. From the perspective of Polish tax law, it is therefore not enough that an employee performs work from Poland. There must also be a real connection between the enterprise and a specific place that can be regarded as a fixed place of business in Poland.

This distinction is highly important in practice. If every place from which an employee occasionally or permanently worked remotely were automatically treated as a permanent establishment in Poland, the concept would become unreasonably broad. That is why the court stressed the need for premises to be at the disposal of the enterprise, rather than simply any location from which an employee logs in to the employer’s systems.

When can a permanent establishment of a foreign company arise in Poland?

Under the Poland–Germany double taxation agreement, a permanent establishment means a fixed place of business through which the business of an enterprise is wholly or partly carried on. Article 5 lists examples such as a place of management, a branch, an office, a factory or a workshop. It also provides that a building site or construction or installation project generally becomes a permanent establishment only if it lasts more than 12 months.

The same article also excludes certain activities from the permanent establishment definition, including activities of a preparatory or auxiliary character. In addition, Article 5 covers situations in which a person acting in a state on behalf of the enterprise has and habitually exercises authority to conclude contracts there. This is why the analysis cannot stop at asking whether someone is physically present in Poland. The legal and operational model must also be examined.

From a Polish tax perspective, this matters because companies without their registered office or management board in Poland are generally taxed only on the income they earn in Poland. Where a foreign company is considered to operate through a permanent establishment in Poland, Polish CIT consequences may follow for the profits attributable to that activity.

The auxiliary nature of the work also mattered

The Supreme Administrative Court focused not only on the absence of a fixed place of business, but also on the type of work performed in Poland. The employees handled administrative, organisational and technical tasks supporting the company’s main business rather than forming its core revenue-generating activity. That made it easier to treat their work as auxiliary or preparatory in nature.

For foreign businesses, that is an important practical guideline. The closer the Polish-based team is to core business functions, client relationships, commercial negotiations or revenue generation, the greater the permanent establishment risk in Poland may become. By contrast, back-office, administrative or technical support performed without company-controlled infrastructure in Poland is generally easier to defend as a model that does not create a permanent establishment. This is a practical inference from the treaty rules and the facts emphasised by the court.

What conclusions should not be drawn from this judgment

This judgment does not mean that every remote work model automatically excludes a permanent establishment in Poland. The better conclusion is narrower: home office does not create a permanent establishment by default, but it does not rule it out in every case either. Each structure must be assessed individually under Polish tax law and the relevant double taxation treaty.

In practice, the risk is more likely to rise where the foreign company organises dedicated workspace in Poland, requires work to be performed from a particular location, uses that place for client-facing activity, stores operational documentation or goods there, or gives Polish-based personnel authority that goes beyond support functions and moves closer to running the business itself. That is not a verbatim holding of the court, but a practical implication of the fixed place of business and dependent-agent tests reflected in Article 5 and in the reasoning reported for this case.

What foreign companies employing remotely from Poland should do

In practice, foreign companies should make sure that their documentation and operating model are aligned. Employment contracts and internal remote work policies should clearly state that the employee works from a place chosen by the employee and that the company does not obtain any right to use that space. It is equally important to describe the employee’s duties precisely, so it is clear whether they are auxiliary or whether they relate to the company’s core business. These steps are consistent with the factors that proved decisive in the judgment.

It is also worth checking whether day-to-day reality matches the documentation. Even a well-drafted contract may offer limited protection if, in practice, the employee negotiates contracts, regularly meets clients in Poland or performs key business functions from Poland. In a tax dispute, the actual operating model will usually matter at least as much as the wording of internal documents. This is a practical conclusion that follows from the treaty criteria and the court’s emphasis on the specific facts of the case.

When planning remote employment from Poland, it is therefore sensible to assess the permanent establishment risk, employer obligations and settlement model at the design stage. In such cases, getsix® can support foreign companies with tax advisory in Poland and payroll services in Poland, helping to structure processes properly and reduce practical compliance risk.

What does this Supreme Administrative Court (NSA) judgment mean for businesses?

The main takeaway is practical and business-focused: an employee’s private home used for remote work from Poland does not automatically become a fixed place of business of a foreign company. To conclude that a permanent establishment in Poland exists, stronger connecting factors are needed than home office and the provision of work equipment alone. In particular, the analysis should focus on whether the company actually has premises at its disposal in Poland and whether business activity carried on there goes beyond preparatory or auxiliary functions.

For foreign companies employing staff from Poland, this is a welcome and commercially relevant signal. At the same time, it does not remove the need for an individual review of the employment structure, the scope of duties and the actual way the business operates. The more the Polish activity starts to resemble the real conduct of business in Poland, the greater the risk that the tax authorities may try to argue that a permanent establishment exists and that Polish CIT obligations arise.

Case law:
Judgment of the Supreme Administrative Court of Poland of 28 October 2025, case no. II FSK 163/23

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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