Returning to Poland: tax settlement in the relocation year and taxation of foreign income – a complete guide for those returning from emigration (Part 4)

A return to Poland (especially after a longer break, e.g., returning to Poland after 10 years abroad) usually means a shift in your legal and tax environment: different forms, different deadlines — and, most importantly — different rules for determining where and to what extent you must settle your income.

For entrepreneurs and individuals managing private wealth, three areas are typically critical:

1. Tax residency – it determines whether you settle in Poland only “Polish” income, or also foreign income.
2. Double taxation agreements (DTA) – they define whether a given income is exempt in Poland (with a potential impact on the rate) or settled with a credit for foreign tax paid.
3. Proper documentation of foreign tax and FX conversions – without this, it’s easy to end up with corrections or a dispute with the tax authorities.

In this article, we focus on the practical approach to settlement in the year of relocation, and on the rules for taxing the most common types of foreign income after returning to Poland.

Step 1: Determine from when you are a Polish tax resident

If you are a Polish tax resident, as a rule you settle tax in Poland on income regardless of where it was earned — while applying relevant international treaties. If you are not a Polish tax resident (i.e., you are a non-resident), you generally settle in Poland only income earned in Poland.

In practice, residency is typically determined using two statutory criteria (meeting one is enough):

• having your centre of vital interests (personal or economic) in Poland, or
• staying in Poland for more than 183 days in a tax year.

The day count alone does not always decide the outcome. In residency conflicts, treaty criteria (tie-breaker rules) can be decisive — for example, based on permanent home and centre of vital interests.

If two countries consider you a tax resident, the tie-breaker rules in the relevant double taxation agreement will determine the outcome.

What evidence is worth preparing

In residency disputes, facts matter. When returning to Poland, the typical elements that help demonstrate your “centre of interests” include: where your family lives, permanent housing, where you manage assets or a business, professional links, banking, insurance, and children’s schooling.

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Step 2: The relocation year – how to treat income earned before and after the move

The most common difficulty in the relocation year is that within one tax year you may have:

• a period of employment/business activity abroad,
• a period of activity after moving to Poland,
• and sometimes parallel income sources in two countries.

There is no universal answer for every case. In practice, it’s safest to run a short step-by-step review:

1. Confirm the dates and circumstances of the move (when your centre of interests changed, when you started living in Poland, number of days in Poland).
2. Identify income sources (employment, business/B2B, dividends, rental income, asset sales).
3. Check the relevant treaty and the method for avoiding double taxation.
4. Collect documents confirming foreign tax paid and the taxable base (e.g., annual summaries, certificates).

Poland’s Ministry of Finance (MF) guidance allows a change of tax residency during the year (often referred to as “split-year” / “broken” residency). In practice, this means the scope of Polish taxation may differ before and after the residency change — and settlement should be based on specific dates and evidence.

Only then can you safely determine which income — and which part of it — should appear in the Polish annual return.

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Step 3: How to tax foreign income in Poland after returning

Methods of avoiding double taxation

If income may be taxed in two countries, in Polish practice you most often encounter one of two methods:

1. Exemption with progression – foreign income is exempt in Poland, but it can affect the effective rate applied to income taxed in Poland (progression effect).
2. Proportional credit (tax credit) – foreign income is taxed in Poland, and foreign tax paid can be credited (within statutory limits).

Which method applies depends on the treaty with the country concerned (or — if no treaty exists — domestic rules).

The most common income categories for people returning to Poland

Below is a practical overview of scenarios that most often arise when returning to Poland from abroad.

1. Salary from work abroad and remote work

For employment income, key factors include where the work is actually performed and what the treaty says (including the common “183-day rule” and employer-related conditions).

Practical takeaway: if you return to Poland and start working remotely from Poland (even for a foreign employer), the taxation setup may change — and it should be verified against the relevant treaty and the real employment model, including where the work is physically performed.

2. Business activity, B2B contracts, managing a company abroad

For entrepreneurs, it’s crucial to establish where income arises and whether post-relocation activity creates a meaningful operational base for settlements in Poland (or abroad).

After the move, errors most often result from:

• confusing an individual’s tax residency with the “place” of taxation of specific income,
• lack of consistency between the treaty approach and the actual service delivery model,
• incorrect treatment of foreign advances/withholding/paid tax in the Polish settlement.
3. Dividends, interest and foreign investment income

Capital income often has separate treaty rules and may be taxed at source abroad. After returning to Poland, you usually need to assess whether — and how — to report it in Polish forms, and how to account for foreign tax (if the credit method applies).

4. Rental income from real estate abroad

Real estate income (e.g., renting out a flat in Germany) is frequently covered by specific treaty allocation rules. After returning to Poland, the key question is whether the income is exempt with progression or settled with a tax credit — this depends on the treaty.

5. Sale of assets (shares, stocks, other property rights)

Selling assets after relocation can create tax consequences in more than one country — especially if the asset was acquired while you lived abroad or the financial institution operates in a different jurisdiction. It’s worth planning ahead, because the relocation year tends to be particularly sensitive.

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Step 4: Forms and documents – what you typically need

PIT/ZG as a key attachment for foreign income

If you report foreign income in Poland and show foreign tax paid, you typically use PIT/ZG — the Polish information attachment for income/revenue earned abroad and tax paid in a foreign country. In practice, you often prepare a separate PIT/ZG for each country where income was earned.

The most important documents
For a safer settlement, you usually need:

• annual summaries from the foreign employer/institution (often an equivalent of Poland’s PIT-11),
• confirmations of foreign tax paid (statements, decisions, certificates),
• data on the taxable base and social contributions withheld abroad,
• exchange rate information (if income is in a foreign currency).

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Step 5: FX conversions and foreign tax – rules that affect the actual outcome

Income earned in foreign currencies is generally converted into PLN using the average exchange rate of the National Bank of Poland (NBP) from the last business day preceding the day the income was received (analogous rules apply to costs and foreign tax paid in a foreign currency).

This is a technical detail, but it matters in practice: exchange rate differences can change the taxable base and the credit limit for foreign tax.

Deadlines and how to organise settlement after your return

As a rule, annual filing in Poland runs from 15 February to 30 April of the year following the tax year.

It’s also worth remembering the practical side of Your e-PIT (Twój e-PIT):

• PIT-37 and PIT-38 may be automatically accepted after the deadline,
• while PIT-36 (common with foreign income) requires you to complete and approve it yourself.

For people returning to Poland, this matters because foreign income often falls outside the “automatic” settlement path.

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Moving back from Germany to Poland: what to pay special attention to

Returning from Germany often means that some income streams or assets remain on the German side. In practice, many returnees have, in parallel:

• employment income from Germany (sometimes only for part of the year),
• German benefits or pensions,
• rental income or a property sale,
• accounts and financial products in Germany.

For example, tax practice indicates that employment income from Germany can be settled using the exemption with progression method — and income settled under this method is not covered by Poland’s abolition relief (ulga abolicyjna).

If you have other income categories (e.g., capital income), the settlement method may differ—so it’s worth checking each stream separately.

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If you plan business activity after returning: taxes are only one element

If you combine returning to Poland with starting a business (or moving part of your operations to Poland), risks typically arise at the intersection of:

• sales model and where services are performed,
• choice of taxation form and record-keeping obligations,
• VAT registration and reporting.

At the planning stage, it often pays to connect the “private” analysis (residency, foreign income) with the business one. Support in this area may include tax advisory in Poland as well as processes related to registering company in Poland.

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Summary: key actions for settlement after returning to Poland

If you want to handle the relocation year as safely as possible, go through the process in this order:

• Determine tax residency and the “turning point” in the year (facts, days, centre of interests).
• List all income sources (Poland + abroad) and assign them to jurisdictions.
• Verify the double taxation method for each country and each income category.
• Collect documents confirming foreign tax paid and the taxable base.
• Check filing obligations (including PIT/ZG) and deadlines — don’t assume the system will accept everything automatically.
• Ensure correct currency conversions.

If your situation involves multiple countries, different income types, or a change of working model (e.g., remote work after returning), it’s often worth doing a short tax review before filing — especially in the relocation year. In such cases, you can use getsix® support under tax services in Poland to organise income sources, correctly apply treaties and methods for avoiding double taxation, and prepare settlement based on complete documentation.

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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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