Sole proprietorship and employment abroad: 30% of the daily allowance and days abroad

Do you run a sole proprietorship (JDG) while also receiving separate remuneration from employment performed abroad? This guide concerns only the reduction in employment revenue described by Poland’s Ministry of Finance. It is not a guide to reducing amounts invoiced through your JDG or accounting for services provided by your business.

What the reduction by 30% of the daily allowance means

The Ministry of Finance information on income from employment performed abroad states that part of the revenue from such employment is tax-exempt. The Ministry describes the possibility of reducing revenue by an amount equivalent to 30% of the daily allowance for each day spent abroad during which the taxpayer remained in an employment relationship.

Two elements must therefore coincide: being abroad and remaining in an employment relationship on the day concerned. Do not limit this record solely to days when work was actually performed.

Which days the Ministry’s guidance includes

When determining the number of days spent abroad during an employment relationship, the Ministry requires you to include:

• Saturdays,
• Sundays,
• public holidays,
• business trip days,
• annual leave days.

This list does not remove the requirement to be abroad. Merely labelling a day as annual leave or a day off does not replace checking whether it was a day spent abroad during the employment relationship.

The record prepared for this reduction is not a tax residence test in this guide. Do not use it to draw conclusions about your tax residence.

The reduction and the method for avoiding double taxation

According to the Ministry’s guidance, the amount equivalent to 30% of the daily allowance is deducted from employment revenue regardless of the method used to avoid double taxation. This still concerns days spent abroad during which the taxpayer remained in an employment relationship. This guide does not determine which method applies to your situation.

Where the daily allowance amount is specified

The Ministry refers to the Regulation of the Minister of Labour and Social Policy of 29 January 2013 on amounts payable to employees of state or local-government budgetary units in connection with business travel. This information appears in the same Ministry publication. We do not provide daily allowance rates or calculations here.

An optional organizational record

To organize your information, you can prepare your own list covering:

• the start and end of the employment period,
• days spent abroad within that period,
• identification of Saturdays, Sundays, public holidays, business trip days and annual leave days among those days.

This is solely an optional organizational recommendation, not a requirement stated here to maintain an additional register. The list does not confirm your individual entitlement to the exemption.

Do not apply this rule to your sole proprietorship

This article discusses an exemption for part of employment revenue, not the costs of an entrepreneur’s foreign business travel. Those costs are left to the separate guide on business travel. Do not treat this explanation as a basis for reducing revenue from invoices issued through your JDG.

This is not a complete guide to settling tax on foreign employment remuneration or an assessment of your entitlement to the exemption. Determining tax residence and the applicable treaty method, employee tax-deductible expenses, PIT-0 reliefs, calculations, tax return forms and filing deadlines, advance tax payments, VAT, ZUS and A1 are outside its scope.