According to an individual tax interpretation of the Director of the National Tax Information Office of 22 April 2025 (ref. 0115-KDIT1.4011.176.2025.1.MR), the remuneration of a management board member who is: (i) a German tax resident, (ii) delegated to perform functions in a Polish company on the basis of an employment relationship with a German entity, and (iii) remunerated exclusively on the basis of this contract, is subject to a flat rate of 20% tax in Poland.

The fact that this income is subject to taxation in Poland does not raise any doubts as the nature of the activities performed determines the place of taxation. It is irrelevant that the formal employer is a German company and the remuneration is paid outside of Poland. Under Article 16(1) of the double taxation treaty between Poland and Germany, salaries of members of the management board may be taxed in the country where the company has its registered office – in this case, Poland.

What is surprising, however, is the qualification of this remuneration as income from activity pursued personally (Article 13(7) of the PIT Act) and, consequently, the application of a flat tax rate. In similar cases, where members of the management board perform this function on the basis of an employment contract with a Polish entity, their income is treated as income from an employment relationship and taxed progressively.

It should be borne in mind that, in the described situation, the duty to settle and pay the tax is on the board member as there is no tax remitter in Poland.

Find more articles in PRO HR May 2025.