Poland tax authorities scrutinize refugee-related VAT and residency

Tax authorities in Poland are increasing scrutiny regarding the tax obligations of Ukrainian citizens residing in the country. Legal experts warn that many individuals working remotely for Ukrainian companies mistakenly believe that paying taxes in Ukraine exempts them from Polish obligations. However, tax residency in Poland is determined by the center of vital interests, such as family residence, children's schooling, or long-term habitation, which can trigger the requirement to report all global income to Polish authorities.

Simultaneously, hospitality businesses that provided aid to refugees following the 2022 invasion are facing unexpected VAT challenges. The National Revenue Administration (KAS) has, in some instances, classified state-funded aid payments as commercial service fees subject to VAT. This has prompted parliamentary inquiries, as business owners argue they acted in good faith based on government-established rates and protocols during the humanitarian crisis, without being informed that these funds could be treated as taxable commercial revenue years later.