Tax consultation - Poland - Norway
If you need to discuss your annual tax return from Norway, our accountant will help you determine your obligations. Based on a few details and a preliminary annual tax return, we will advise which tax deductions are available to you in Norway and whether they are worthwhile, and we will also help you initially determine your tax residency, so you can find out whether, and if so how much, tax you may need to pay in Poland.
We also offer corrections to the Norwegian annual tax return (including up to 3 years back) and the Polish PIT (up to 5 years back).
1. What is included in the service?
The service is a telephone tax consultation. It covers such aspects as:
- Determining tax residency - essential for deciding where you should file - in Poland, in Norway, or perhaps in both countries?
- Which documents should you submit in Poland and Norway?
- An initial calculation of the benefit of using deductions - it is great that you get a refund in Norway, but what if it is then taken back in Poland?
- Determining whether it is worthwhile to give up kildeskatt 25% and the tax consequences in Poland
- Calculating whether pendler status is worthwhile and the tax consequences in Poland
- Consulting on possible errors in previous annual tax returns and deductions
- Clarifying doubts and myths that have built up in this area
- Your questions and our answers on this topic
We have expert knowledge in this area - you can check our tools (Poland Norway tax calculator and tax residency calculator). NOTE! The promotional price for the service is available for a limited time!
Check our recordings on this topic.
2. When is it worth using the service?
- When you do not know in which countries to settle your Norwegian and Polish earnings
- When you want to check tax deductions and whether they are worthwhile
- When you want to find out where you probably have tax residency
- When your situation is unusual and you do not know how the tax issue works
- When you are on kildeskatt 25% and are thinking about giving it up
- When you would like to file as a pendler
- When you sold a house/apartment/shares etc. in Poland or Norway and do not know how and where to report it
- When you believe there is an error in the annual tax return and want to check it
3. In which countries do I have to file an annual tax return?
To find out where we need to file, we must know our tax residency. This is the place where we have unlimited tax liability - meaning where we pay tax on earnings, including from countries other than our country of tax residence (in most situations).
In the case of Poland and Norway, it works like this:
- if you are a Norwegian resident and earn only in Norway, you file only in Norway,
- if you are a Norwegian resident with earnings also in Poland, you must file in both countries,
- if you are a Polish resident and earn in Norway, you must also file in both countries.
If your residency is in Norway - you have unlimited tax liability in Norway - which means you file there on all income from around the world. If your residency is in Poland - you have unlimited tax liability in Poland - which means you file in Poland on all income from around the world. Normally you can deduct taxes paid in other countries. In those countries you are subject to limited tax liability - you file only on income earned in that country.
4. When do I have to pay tax in Poland?
In this matter, tax residency is also important, because in the case of work in Norway it determines where and what tax we pay. The situation is as follows::
- if you are a Norwegian resident and earn only in Norway, you pay tax 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 tax on Polish earnings in Poland and in Norway, and tax on Norwegian earnings only in Norway
- if you are a Polish resident and earn in Norway, you pay tax in Norway on Norwegian earnings and in Poland on all earnings.
5. How do I determine tax residency?
When initially determining tax residency, we must take into account:
- in which country we stayed for more than 183 days,
- in which country our family stays (wife, minor children),
- in which country we have a permanent place of residence (a property we own, rented for more than half a year, or the one where we live with family or friends),
- in which country we have closer personal and economic interests
- in which country we stay permanently (the place where you spend a significant part of the year, e.g. more than 2/3)
- in which country we are citizens
After analysing the answers to all or some of the questions, we can initially determine our tax residency. Even so, every situation is individual and the fact that we stay longer than 183 days, for example in Norway, does not make us Norwegian residents. Norway has signed a double taxation treaty with Poland. On that basis, the above criteria were defined. On that basis, you also cannot be a resident in both countries.
If we wanted 100% certainty about our tax residency, we would need to submit an application for a residency determination to KIS (National Tax Administration). They will interpret our situation individually, so we can refer to their letter in the event of an audit, which means our case will be dismissed. Such an application will also be necessary in some more complicated situations.
As for a tax residency certificate, it is not a document proving 100% residency in one of the countries. It only confirms that the conditions for residency in a given country have been met. Norway or Poland may issue such a document, but it does not in any way release you from tax obligations in the other country if these arise under the rules. This means that, for example, if the Tax Office required us to make up tax due to double taxation, referring to a residency certificate would not change much in our situation; it is only a weak argument. The office will require proof that we are Norwegian residents - meaning evidence that a number of residency requirements have been met. The certificate alone will not matter. The only document we can arrange for you in contentious situations is an individual interpretation from the National Tax Information Office.
6. When do I have to pay tax in Poland?
Deductions are worth taking into account in the tax return when:
- we are tax residents in Norway and only have earnings here,
- if we do not have a top-up tax in Poland caused by double taxation
In the second case for Polish residents we can check this using the tax calculator:
- Go to Poland-Norway tax calculator
- Enter the data according to the actual situation in Poland and Norway
If a top-up tax appears - it means that all deductions are completely unprofitable for you. What you deduct in Norway will come back to you as tax due in Poland. For example, a refund of 10.000 NOK in Norway will cause a top-up tax of 10.000 NOK = 4.500 zł. in Poland. If you conceal information about income in Norway - you will most likely pay this difference with interest within 2-3 years. Tax offices communicate very well with each other. At present, according to the documents we receive from clients, Poland is checking "double taxation" from 2-3 years ago. We can expect intensified audits for 2021 and later, due to major changes in the tax calculation system between Poland and Norway.
7. What deductions are possible?
The deductions applicable in Norway can be found on the Annual tax return for private individuals page. Here is just the list:
- Related to family and children:
- Kindergarten, SFO, transport to them and a childminder for children under 12 years of age
- Care for disabled children
- Selected maintenance payments (only up to 2019)
- Deduction for a single parent
- Related to work or education:
- Minstefradrag - depends on the number of months worked in Norway
- Personfradrag - depends on the number of months worked in Norway
- Travel to work (min. 65 km round trip)
- Tolls and ferries above 3300 kr
- Pendler - if your family or home is in a different place from where you work - deduction for travel, accommodation, subsistence allowance
- Trade union fees
- Relocation for work reasons
- Study costs (when they exceed minstefradrag)
- Work as a fisherman
- Work as a seafarer
- Work on a platform
- Related to property:
- Costs related to shares in borettslag and similar
- Costs related to rental (if you rent out property and have to pay tax on it)
- Loss on sale of property
- Related to finances:
- Loan interest
- BSU - housing savings contributions up to the age of 33
- Loss on sale of shares or securities
- Donations to selected charities (practically only Norwegian ones)
However, the following must also be included in the annual tax return in Norway:
- Earnings from abroad (including Poland), if you are a Norwegian resident
- Gains from trading currencies and cryptocurrencies, if you have withdrawn the given currency or cryptocurrency
- Share gains - if you received a dividend or a gain from realising shares
- Gains from the sale of property
8. Kildeskatt 25%
With this tax option, we cannot file an annual tax return, so deductions are also not possible under kildeskatt 25% PAYE. However, it is worth considering giving up this tax if you earn less than 40.000kr/month (480.000kr/year).
We can help you switch to the standard tax return, thanks to which you can receive a refund of up to 3 years back! More information can be found here: https://efremtid.no/zmiana-payee-kildeskatt/
9. When is it worthwhile to file as a pendler?
It should be remembered that filing as a pendler is not always worthwhile. It is only worthwhile when we are not subject to a top-up tax in Poland due to double taxation on earnings from Norway.
Why is it not worth using pendler status and claiming deductions in some situations? Because under the rules on avoiding double taxation, what is deducted in Norway will be added back and we will have to pay it in Poland.
We will also check during the consultation whether pendler deductions are beneficial for you.
If pendler deductions are not worthwhile for you, you can do a few more things. First of all, it is worth:
- filing jointly with your spouse in Poland
- documenting the number of days in Norway, e.g. with plane tickets or a tenancy agreement (subsistence allowance)
This often makes the deductions more favourable than those under pendler status.
10. Selling a house in Poland and reporting the sale in Norway
When you sell property in Poland and live in Norway and have your residency here, in most cases you should also report it in Norway. You do not have to do this and you do not pay tax on the sale in Norway when:
- you have owned the property for more than 12 months and during that period used it as your own home for at least 12 of the 24 months preceding the sale OR
- you used the flat 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 of your situation and the Poland-Norway tax system. You will find out:
- What your tax residency is
- Which documents you should collect so that you can prove it to the office in the event of an audit
- What tax consequences arise from your residency
- Where you have to file and whether it is worth filing at all
After the consultation, we will tell you above all which tax returns you need to submit. The result may be:
- You are a resident in Norway and also earn in Poland - you file PIT in Poland and must file in Norway (PIT in Poland is then standard, without taking foreign earnings into account)
- You are a resident in Norway and have tax reliefs/deductions - you file a tax return in Norway with deductions
- You are a resident in Norway and have no reliefs or earnings in Poland - the tax return is filed automatically in Norway
- You are a resident in Poland and earn in Norway - you file PIT in Poland with appendix PIT-ZG
- You are a resident in Poland and earn in Norway and have Norwegian reliefs - you file PIT in Poland with appendix PIT-ZG and, depending on the profitability of the Norwegian reliefs, a Norwegian tax return
In other words, we will tell 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.