New procedures to obtain tax ID number now cover all foreign nationals

IMPACT – MEDIUM

What is the change? Poland has now stopped issuing tax ID numbers automatically to EU nationals as well as non-EU nationals.

What does the change mean? All foreign workers who require a tax ID number, including EU nationals, must follow separate procedures to acquire the number. In the past, an ID number (PESEL) that also served as a tax ID number was issued to foreign residents in the immigration process.

• Implementation time frame: Immediate.
• Visas/permits affected: Work permits and residence permits.
• Who is affected: All foreign employees who are subject to taxes and require a tax number.
• Impact on processing times:Estimated processing time to obtain the tax number is two weeks.
• Business impact: The new process adds an administrative burden and costs to employers and foreign nationals who require a tax identification number.
• Next steps: Foreign employees who have signed a local employment contract and are paid in Poland must take steps to apply for an NIP number which will be required to settle taxes.

Background: Last month, Poland stopped issuing PESEL numbers to non-EU nationals. Polish authorities have now stopped issuing the number to EU nationals.

The PESEL number is an 11-digit number used to access services at government offices, banks, hospitals and for tax purposes. In the past, the number was issued automatically when a foreign worker registered their local address. A different type of number is now being issued in lieu of the PESEL, called an NIP or “tax identification number.” This involves a separate process for foreign nationals outside of the immigration procedures.

BAL Analysis: The change will not affect foreign assignees posted to Poland, but will affect all foreign nationals working on local contracts with a Polish employer. Companies should be aware that even EU nationals will no longer receive a PESEL number automatically and must take steps to apply for an NIP number. BAL can assist employers and foreign employees in this process.

This alert has been provided by the BAL Global Practice group and our network provider located in Poland. For additional information, please contact your BAL attorney.

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