Changing Tax Residency

Changing tax residency allows you to move the centre of your personal and economic interests outside Poland, and with it your tax liability. It is a solution increasingly chosen by entrepreneurs, investors and people running online businesses, for whom Polish tax rates are becoming a barrier to further growth. The process itself, however, requires specific conditions to be met and properly documented, otherwise the tax office may challenge the change at any time.

What does the process involve?

Changing tax residency is much more than formalities at a tax office. The key is the actual relocation of the centre of vital interests – place of residence, work, and family and property ties – to another country, in accordance with Polish law and the double taxation treaty with the destination country. Without this, the Polish tax authorities may continue to treat a person as a Polish tax resident, regardless of a formal departure.

Choosing a jurisdiction

The choice of the country of new residency depends on the nature of the business, the source of income and the goals the client wants to achieve: lower taxation, simplified rules or greater freedom in running an international business. Both tax rates and requirements concerning actual stay, the minimum residency period and reporting obligations in the given country are analysed.

What does legal support involve?

Support includes developing a residency change strategy matched to the client's situation, preparing documentation confirming the relocation of the centre of vital interests and advising on tax obligations arising both in Poland and in the new country of residence. An important element is also the assessment of risk related to exit tax, which may apply when transferring assets above a certain value.

Who is this solution for?

The solution mainly concerns people whose business does not depend on physical location: in the cryptocurrency, IT, trading or digital services industries, for whom a change of residency genuinely translates into lower tax burdens. It requires, however, a carefully thought-out strategy and time, because a mere declaration of a change of residence without actually moving one's life abroad is not sufficient and may be challenged by the tax authorities.