SWEDISH MANAGING DIRECTOR NOT TAXED IN POLAND
In the application for the tax ruling, the taxpayer stated that the taxpayer will be a Polish tax resident and will receive the salary from the Swedish company in which the taxpayer will be employed as the managing director (verkställande director). The issue that the tax authority dealt with was a proper classification of the salary of the Swedish managing director under the regulations of the treaty on avoidance of the double taxation concluded between Poland and Sweden (“Treaty”). Such exercise was further complicated due to the different classification of the position held by the taxpayer in the Swedish company under the laws of Poland and Sweden. Different classification of the salary received by the taxpayer by the Polish and Swedish tax authorities could lead to the double taxation (or double non-taxation) that could not be avoided by the application of the regulations of the Treaty.
The Head of the Tax Chamber finally decided that, even despite the fact that verkställande director is not the member of the board of directors of the Swedish company, still the salary of verkställande director should be taxed in the country where the registered office of the company is located, i.e. pursuant to the rules set forth for the members of the board of directors in Article 16 of the Treaty. Consequently, the Head of the Tax Chamber confirmed that the salary of the Polish tax resident performing the function of verkställande direktör of the Swedish company based on the employment agreement should be taxed only in Sweden and exempt from the income tax in Poland.
The ruling issued by the Head of the Tax Chamber in Warsaw gives certain clarity on the approach presented by the Polish tax authorities with respect to the taxpayers employed at the position of the managing director not only in Sweden but also in other countries having similar structure of corporate bodies (this includes among others remaining Scandinavian countries).
GLOBAL LEGAL INSIGHTS TO: MERGERS & ACQUISITIONS IN SWEDEN AND NORDIC COUNTRIES 2019
We encourage you to read our publication on The Global Mergers & Acquisitions market in Sweden and Nordic countries in the eighth edition of The Global Legal Insights.read more
PROGRAM POLAND PRIZE
Polski rząd włączył się w walkę o przyciągnięcie zagranicznych talentów technologicznych, proponując program Poland Prize adresowany do start-upów z zagranicznymi korzeniami.read more
POLAND PRIZE PROGRAMME
The government has joined the battle to attract foreign tech talent to Poland, launching a programme called Poland Prize, which is aimed at start-ups with foreign roots.read more
SHORT-TERM LEGAL CONSEQUENCES OF A 'NO-DEAL' BREXIT
Judged on the current political situation in the UK, where the parliament is split between various Brexit models and apparently unable to form a political majority for one specific ‘soft’ Brexit model as well as on the announcements from the EU that the EU is not willing to renegotiate the draft Brexit deal, which was turned down by the Houses of Parliament, the likelihood of a hard Brexit has become higher than ever.read more