Does hiring herecreate a tax presence.
Employing one person in Poland does not usually create a permanent establishment, but a fixed office, or somebody who habitually closes deals there, can. Teamed can tell you which side of that line your setup sits on.
What the term means
What a permanent establishment actually is
A permanent establishment is a tax idea, not a company. It is the point at which a foreign business is treated as having enough of a presence in a country that the country can tax the profit earned there. You do not register one. You either have one or you do not, and the answer comes from facts rather than paperwork.
Two things usually create it. The first is a fixed place of business, an office, a workshop, somewhere the business is carried on from. The second is a person who habitually concludes contracts on the company's behalf, even with no office at all. That second route catches people, because it needs nothing more than a laptop and the authority to say yes.
There is an exception for activity that is only preparatory or auxiliary. Storage, market research, an office that gathers information and nothing else. The moment that work becomes the actual business, the exception stops applying.
Where the line usually falls
The engineer is rarely the risk. The sales hire often is.
One developer working from home in Krakow, writing code used everywhere, is a weak case for a permanent establishment. They are not concluding contracts, the home is not the company's place of business in any meaningful sense, and the work is not where the money is made.
One salesperson in the same flat, negotiating and closing deals with Polish customers, is a much stronger case. Nothing about the property changed. What changed is what the person does, and that is what the test looks at.
Poland deserves particular attention because it hosts a great deal of outsourced engineering and shared-service work for foreign groups. Those teams are usually a weak case on their own, and the risk arrives when somebody in them starts carrying commercial authority as well.
An employer of record does not automatically remove the risk
This is worth saying plainly because it is sometimes sold the other way. An employer of record solves the employment question, meaning who legally employs the person and who runs their payroll. It does not decide, on its own, whether your business has a taxable presence. That still depends on what the person does and who they do it for. If somebody is closing deals for you in Poland, the arrangement behind their payslip is not the deciding fact.
What reduces it
What actually lowers the risk
Be honest about authority. If nobody in Poland can sign, and contracts are genuinely negotiated and concluded elsewhere, say so in the contracts and then behave that way. A limitation everybody ignores is worse than no limitation, because it looks like a plan to hide something.
Keep the role description and the reality in the same place. The risk usually appears when a job quietly grows. Somebody hired to support customers starts closing renewals, and nobody revisits the position for two years.
And take advice once the answer starts to matter. If a permanent establishment does exist, Poland taxes the profit attributable to it at corporate rates, and the cost of being wrong for several years is considerably larger than the cost of asking.
Worth saying plainly
If you already have a presence, an entity may be simpler
Sometimes the honest answer is that the presence already exists and the question is no longer whether to avoid it. At that point a Polish company can be the cleaner structure, because you are reporting something you already have rather than arguing about whether you have it.
Equally, if the work here is genuinely engineering or support and nobody is closing anything, an employer of record is often the right answer and a fair one rather than a lesser one.
Teamed's employer of record in Poland is a flat €560 per employee per month, with zero FX mark-up in any currency pairing and one invoice at the end of it. Contractors, employer of record and your own entity all run on one platform, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work, not a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it for Poland.
Who carries it
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for corporation tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it.
In Poland that matters a little more than elsewhere, because Teamed employs through its own local entity rather than a partner. The people who would run your company are the people already running ours.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Questions about permanent establishment
Does one remote employee create a permanent establishment?
Usually not on its own. It depends on what they do. An employee who cannot conclude contracts and whose work is not the core of the business is a weak case. One who habitually closes deals is a strong one.
Does a home office count as a fixed place of business?
It can, but it is fact specific. Tax authorities look at whether the company effectively has the space at its disposal and whether the business is genuinely carried on from there.
Does using an employer of record remove the risk?
No, not by itself. It answers who employs the person. Whether your business has a taxable presence still turns on what that person does in Poland.
We have an engineering team in Poland. Are we at risk?
Engineering and shared-service work is usually a weak case on its own. The risk arrives when somebody on that team starts carrying commercial authority as well as technical work.
What is the tax if we do have one?
Poland taxes the profit attributable to the presence at corporate rates, 19% standard with 9% available on non-capital income for small taxpayers.
Sources
- Ustawa o CIT, permanent establishment
- Poland's double taxation treaties, the permanent establishment article
- OECD model tax convention, the dependent agent test
The rest of the Poland guides
Looking for a job in Permanent Establishment Risk yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.
