Poland-Norway settlement 2022 – how to settle so as not to lose?
As a rule, we are convinced that when we work in Norway and stay here most of the year, we also have tax residence here. This is often wrong thinking, which can cost us a lot in the event of an inspection from the Polish Tax Office. Often, by deducting something in Norway, we can actually gain nothing. What is it actually about? Where do I have to settle my accounts? How can I check where and how much tax I have to pay?
We invite you to read.
Tax residence
How to check it? A simple tool
First, let's focus on the issue of tax residence. It determines in which country we should settle our taxes and it has the greatest impact on whether Norwegian deductions will be beneficial in our case or not. There are also other issues here, but the basis for determining settlements is our tax residence.
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- To check the residence click here.
- You will be redirected to our tool that initially checks your tax residence. All you need to do is answer a few questions.
- The result from our tool is not binding. It is only intended to direct you to where your residence is.
- If you want to have 100% confirmation of tax residence, place an order individual interpretation from KIS.
- If you want to consult the result from the tool - order the service tax consultation.
If we already have a verified tax residence, we can proceed to the next NOKok.
Poland-Norway taxes
Do I have to settle my taxes in Poland?
By knowing your tax residence, you can finally determine where you have to settle and pay taxes. In short, it looks like this:
- if you are a tax resident in Norway, you only submit your tax return here if: you are entitled to any deductions, you have to add profits from NOKyptowalut, you have to add earnings from Poland, you have to add income from renting an apartment, Skatteetaten asks you to add a bank account, etc. If none of these things apply to you, you don't have to settle! The office will do it for you automatically :)
If you don't have any earnings in Poland, you don't have to file a tax return there! - if you are a tax resident in Poland, this is where the issue becomes more complicated. Generally, you are then obliged to submit your PIT together with the PIT-ZG attachment, in which you will also show your Norwegian earnings. In Poland, unfortunately, the office will not settle the tax automatically, so each time we have to submit such a declaration ourselves.
Do you have to settle your taxes in Norway? Will it be profitable for you? More on that below.
Where and how much tax will I pay?
If you want to check where and how much tax you will pay, and whether it is worth using deductions in Norway, go to our next tool - Poland-Norway tax calculator 2022.
This is where we can see whether we will have a subsidy in Poland or not. Of course, this only applies if we have Polish tax residence.
After filling in all the fields, we will receive two amounts:
- the first is "Total tax in Norway" - that is how much tax we will pay in Norway in total. This is not an additional payment for the office, but the calculated tax for the entire year, for which we paid advances throughout the year. We can subtract it from the advances paid in the year and then if the amount is positive, then we probably have this much refund, and if negative - then we probably have this much additional payment.
- the second is the “Estimated tax surcharge in Poland” – i.e. how much we will have to pay in Poland from Norwegian earnings based on the double taxation agreement between these two countries.
Let's focus on the second amount now. If it is 0 PLN - congratulations, you don't have any additional payment in Poland! This means that the tax costs entered above in the "Tax data - Norway" section are profitable for you. If you haven't added them - add them now and see if the amount of the estimated additional payment in Poland has not changed. Until it changes, Norwegian deductions are profitable for you.
The situation is different when we receive an additional payment in Poland. Then Norwegian deductions are not profitable for us. Why? Try adding any tax costs in NO. You will notice that the amount of the estimated surcharge in Poland will increase - and exactly by the amount you subtracted taxes in NO. Therefore, it will not be profitable to settle in NO, because what you deduct here, you will give back in Poland the exact equivalent of this amount.
What determines the surcharge and refund in Poland?
As we mentioned earlier, there is a double taxation agreement between Norway and Poland. As the name suggests, it aims to divide taxes and calculate them in both NOKAs in such a way that you simply do not pay taxes twice.
Due to the fact that taxes in Norway are often higher than those in Poland for given earnings, after subtracting them from the calculated taxes in Poland, we get a negative amount - so the taxes are zero and we do not have to pay anything extra in Poland. This is the most favorable situation for us, because it means that deductions in NO are beneficial for us and allow us to reduce tax.
However, when taxes in Poland are higher than Norwegian taxes, we receive an additional payment. Then we will also pay the equivalent of what we deduct in NO in Poland. This is because with deductions, the Norwegian tax will be reduced and the Polish tax will remain the same.
