Tax consultation – Poland – Norway

If you need to consult your annual settlement from Norway, our accountant will help you determine your liabilities. Based on some information and a preliminary annual settlement, we will advise you what tax deductions you are entitled to in Norway and whether they are profitable for you, and we will also initially help you determine your tax residence, which will help you find out whether and how much tax you have to pay in Poland.

We also offer correction of the Norwegian annual settlement (including up to 3 years back) and Polish PIT (up to 5 years back).

1. What's included in the service?

The service consists of a telephone tax consultation. It covers aspects such as:

1. Determining tax residence - necessary to determine where you should settle your taxes - in Poland, Norway or maybe both?
2. What documents should you submit in Poland and Norway?
3. Preliminary calculation of the profitability of using reliefs - it's great that you will get a refund in Norway, but what if they immediately take it away from you in Poland?
4. Determining the profitability and return in the event of waiving the 25% kildeskatt and tax consequences in Poland
5. Calculation of the profitability of pendler status and tax consequences in Poland
6. Consultation on possible errors in previous annual settlements and deductions
7. Resolving doubts and myths in this area
8. Your questions and our answers in this regard

We have expert knowledge in the subject - you can check out our tools (tax calculator Poland Norway i tax residence calculator). ATTENTION! The promotional price for the service is valid for a limited time!

2. When is it worth using the service?

• When you don't know in which countries to settle your Norwegian and Polish earnings
• When you want to check tax deductions and their profitability
• When you want to find out where you probably have tax residence
• When your situation is unusual and you don't know what taxes look like
• When you are on 25% kildeskatt tax and you are thinking about giving up
• When you would like to settle your taxes as a pendler
• When you sold a house/apartment/shares etc. in Poland or Norway and you don't know how and where to settle it
• When you think there is an error in the annual settlement and you want to check it

3. In which countries do I have to file an annual return?

To find out where we need to settle, we need to know our tax residence. This is a place where we have unlimited tax liability - i.e. where we pay taxes on earnings, also from countries other than the country of tax residence (in most situations).

In the case of Poland and Norway it looks like this:

• if you are a Norwegian resident and you only earn money in Norway, you only settle your taxes in Norway,
• if you are a Norwegian resident with earnings also in Poland, you must submit your tax return in both countries,
• if you are a Polish resident and you earn money in Norway, you also have to submit your tax return in both countries.

If your residence is in Norway, you have unlimited tax liability in Norway - this means that you settle all your income from around the world there. If your residence is in Poland, you have unlimited tax liability in Poland - this means that you settle all your income from around the world in Poland. Normally, you can deduct taxes paid in other countries. Your tax liability is limited - you only settle income earned in that country.

4. When do I have to pay tax in Poland?

In this matter, tax residence is also important, which determines where and what taxes we pay when working in Norway. Here the situation is as follows::
– if you are a Norwegian resident and you earn money only in Norway, you pay taxes only in Norway (this is the only way to avoid double taxation)
– if you are a Norwegian resident with earnings also in Poland, you pay taxes on Polish earnings in Poland and Norway, and taxes on Norwegian earnings only in Norway
– if you are a Polish resident and you earn in Norway, you pay tax in Norway on Norwegian earnings and in Poland on all earnings.

5. How to determine tax residence?

When initially determining tax residence, we must take into account:

• in which country we stayed longer than 183 days,
• in which country our family lives (wife, minor children),
• in which country we have a permanent place of residence (ownership property, rented for more than six months or the one where we live with family or friends),
• in which of the countries we have closer personal and economic interests
• which country we permanently reside in (the place where you stay for a significant part of the year (e.g. more than 2/3))
• In which country are we citizens?

After analyzing the answers to all or some of the questions, we can initially determine our tax residence. Nevertheless, each situation is individual and the fact of staying longer than 183 days, e.g. in Norway, does not make us Norwegian residents. Norway concluded a double taxation avoidance agreement with Poland. On its basis, the above criteria were determined. Based on it too you cannot be resident in both countries.

If we want to be 100% sure about our tax residence, we must submit an application to determine the residence to the National Tax Inspectorate (KIS). They will interpret our situation individually, thanks to which we can refer to their letter in the event of an inspection, and our case will be discontinued. Such an application will also be necessary in some, more complicated situations.

Regarding the tax residence certificate, it is not a document proving 100% residence in any country. It only certifies the fulfillment of the residence conditions in a given country. Norway or Poland may issue such a document, but it does not in any way exempt you from tax liability in the other country if it results from the regulations.. This means that, for example, if the Tax Office requires us to pay additional tax due to double taxation, referring to the residence certificate will not change much in our situation, it is a minor argument. The office will require proof of being a Norwegian resident - this means meeting a number of residency requirements. The certificate itself will not matter. The only document that we can handle for you in controversial situations is an individual interpretation of the National Tax Information.

6. When do I have to pay tax in Poland?

Deductions should be included in the settlement when:

• we are tax residents in Norway and we only earn here,
• if we do not have a surcharge in Poland caused by double taxation

In the second case for Polish residents we can check this using the tax calculator:

1. Go Poland-Norway tax calculator
2. Enter the data according to the actual situation from Poland and Norway

If there is an additional payment, it means that any deductions are completely unprofitable for you. What you deduct in Norway will be refunded to you in Poland. For example, a refund of NOK 10.000 in Norway will result in an additional payment of NOK 10.000 = PLN 4.500. in Poland. If you withhold information about your income in Norway, you will most likely pay the difference with interest within 2-3 years. Tax offices have very good communication with each other. Currently, according to documents we receive from clients, Poland is controlling "double taxation" from 2-3 years ago. We can expect intensified inspections for 2021 and beyond, due to major changes in the tax calculation system between Poland and Norway.

7. What are the possible deductions?

Deductions applicable in Norway can be found on the website Annual private settlement. Here's just the list:

• Related to family and children:
  • Kindergarten, SFO, transport to them and babysitter for children under 12 years of age
  • Care for disabled children
  • Selected alimony (only until 2019)
  • Deduction for a single parent
• Related to work or education:
  • Minstefradrag – depending on the number of months of work in Norway
  • Personfradrag – depending on the number of months of work in Norway
  • Commuting to work (min. 65 km round trip)
  • Gates and ferries over 3300 kr
  • Pendler - if you have a family or apartment in a place other than where you work - deduction of travel, housing and per diem
  • Unions
  • Moving for professional reasons
  • Study costs (when they exceed minstefradrag)
  • Working as a fisherman
  • Working as a sailor
  • Working on the platform
• Related to real estate:
  • Costs related to shares in borettslag and similar
  • Rental costs (if you rent a property to someone and you have to tax it)
  • Loss on sale of real estate
• Finance related:
  • Credit interest
  • BSU – housing contributions until age 33
  • Loss from the sale of shares or securities
  • Donations to selected charities (practically only Norwegian ones)

However, the following should be added to the annual settlement in Norway:

• Earnings from abroad (including Poland) if you are a resident of Norway
• Profits from trading currencies and cryptocurrencies if you have withdrawn a given currency or cryptocurrency
• Stock gains – if you received a dividend or profit from the exercise of shares
• Profits from the sale of real estate

8. Kildeskatt 25%

With this tax option, we cannot submit an annual return, so deductions are also not possible with the 25% PAYE kildeskatt tax. However, it is worth considering waiving this tax if you earn less than 40.000 kr/month (480.000 kr/year).

We can help you switch to standard settlement, thanks to which you will receive a refund up to 3 years back! More information can be found here: https://efremtid.no/zmiana-payee-kildeskatt/

9. When is it profitable to settle accounts as a pendler?

Please remember that settling as a pendler is not always profitable. It is only worth it if we are not subject to additional tax in Poland due to double taxation on earnings from Norway.

Why is it not worth taking advantage of your pendler status and taking advantage of deductions in some situations? Due to the fact that due to the rules on the avoidance of double taxation, what is deducted in Norway will be added and we will have to pay in Poland.

We will also check whether Pendler deductions are beneficial for you during the consultation.

If pendler deductions don't work for you, there are a few more things you can do. First of all, it is worth:

• settle accounts with your spouse in Poland
• documenting the number of days in Norway, e.g. with plane tickets or a rental agreement (per diem)

Thanks to this, deductions will often be more favorable than those resulting from pendler status.

10. Sale of a house in Poland and settlement of the sale in Norway

If you sell real estate in Poland and you live in Norway and have your residence here, then in most cases you should also settle it in Norway. You don't have to do this and you don't pay sales tax in Norway when:

• you have owned the property for more than 12 months and during this period you have used it as your home for at least 12 of the 24 months prior to the sale OR
• you have used the property as your own holiday home for at least five of the last eight years and it was sold more than five years after purchase.

11. What happens after the tax consultation?

The result of the tax consultation will be your knowledge about your situation and the Poland-Norway tax system. You will learn:

1. What is your tax residence?
2. What documents should you collect to be able to prove it to the office in the event of an inspection?
3. What are the tax consequences of your residency?
4. Where do you have to settle and is it worth settling at all?

After the consultation, we will tell you what settlements you need to submit. The result of this may be:

• You are a resident in Norway and you also earn money in Poland - you file PIT in Poland and have to settle it in Norway (PIT in Poland is then standard, without taking into account foreign earnings)
• You are resident in Norway and have tax benefits/deductions - you file a tax return in Norway with the deduction
• You are a resident in Norway and you do not have any tax reliefs or earn money in Poland - the settlement takes place automatically in Norway
• You are a resident in Poland and you earn money in Norway - you submit your PIT in Poland with the PIT-ZG attachment
• You are a resident in Poland and you earn in Norway and you have Norwegian tax relief - you submit your PIT in Poland with the PIT-ZG attachment and depending on the profitability of Norwegian tax relief - Norwegian settlement

In other words, we will inform you whether you need to file PIT in Poland and whether it is worth changing the Norwegian tax return. You will also be able to order these two services from us.