As by the end of January 2019 the employers must prepare annual settlements (PIT-11) for 2018 where revenues and advances on income tax are specified, they are in doubt whether the absence of PESEL number among foreigners they employ may prevent the compilation of PIT-11 form for them.
Changes to the obligation to register address
The act of 27 October 2017 amending the Act on Population Records (DZ.U.2017.2286) (“amendment”) which came into force on 1 January 2018, repealed the provisions which were supposed to abolish the obligation to register address from the beginning of this year, thereby disspeling reappearing doubts with that respect.
The amendment also changed the principles of granting PESEL number to foreigners who register address for temporary stay in Poland. Until the amendment came into force, foreigners who applied for temporary address registration had to file an application for assigning PESEL number specifying the actual legal basis authorising them to obtain PESEL number, what involved knowledge, time and effort. From 1 January 2018, foreigners who make temporary address registration are assigned PESEL number automatically without the need to state legal basis. Article 7(1)(3) of the amended Act on Population Records provides that “The PESEL register collects data of foreigners living in the Republic of Poland”. Before the amendment, the PESEL register collected only data of foreigners who were granted permanent resident permit, long-term EU resident’s permit, refugee status, subsidiary protection, asylum, tolerated stay permit, temporary protection or temporary residence permit issued on humanitarian grounds.
Pursuant to Article 42(2) of the Act on Population Records, foreigners are exempt from obligation to register their address when they stay in Poland for less than 30 days. A foreigner who is a citizen of the EU member state, a citizen of the member state of the European Free Trade Association (EFTA) – a party to the Agreement on the European Economic Area or a citizen of the Swiss Confederation staying in Poland, is obliged to register its permanent or temporary address no later than on 30th day from arriving to that address. Other foreigners staying in Poland must register their temporary or permanent address no later than on the fourth day from arriving to that address. The act also provides for a possibility to apply for PESEL number for foreigners who do not stay in Poland.
In connection with the fact that PESEL number became obtainable and obligatory for all foreigners staying in Poland for longer than 30 days, it also became a tax identifier for most of them, and their employers have to take this into account in their contacts with tax administration, in particular when drawing up employees’ annual information PIT-11.
PIT-11 form with NIP or PESEL?
The PIT-11 form is an overview of derived revenue, income, costs and advances on personal income tax in the given tax year. This information is compiled and issued by a tax withholder who calculates, charges and pays advances on income tax throughout the year. PIT-11 form is a fundamental source of data necessary to drawn up yearly tax returns such as PIT-37 and PIT-36.
Pursuant to Article 3 of the Act Governing the Registration and Identification of Taxpayers and Tax Withholders (Dz.U.2017.869, as amended), a tax identifier to be provided in PIT-11 is:
- PESEL number – for taxable individuals registered in the PESEL register who do not conduct business activity or are not registered VAT payers;
- NIP number – for any other entities subject to an obligation to register. NIP number is assigned only to those entities that filed an application to be assigned NIP number and such application is not filed by taxable individuals registered in the PESEL register who do not conduct business activity or are not registered VAT payers
In connection with this, alarming press reports have been circulating about difficulties with e-posting of PIT-11 without a foreigner’s PESEL number or even warnings that PIT-11 without PESEL number will be rejected by IT system of a tax office. As of the date of this newsletter, no such information were confirmed by phone either by the National Fiscal Information or e-processing departments of several tax offices in Warsaw (e.g. Tax Office for Warsaw Praga District). Our interlocutors only reconfirmed the current practice of inserting number of ’nines’ in place of the missing PESEL number in order to post PIT-11 form to a tax office. No official statement was issued that would indicate any change in completing PIT-11 form for foreigners.