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Polish client charging me 20% Polish tax?
Thread poster: Emily Lemon

Emily Lemon  Identity Verified
Austria
Local time: 00:54
Member
German to English
Apr 14, 2008

I recently completed a rather large translation job for a German artist (with whom I made the actual contract). The work is being paid for by a Polish museum. When the payment was transferred I discovered that 20% had been taken off the top. I asked why it was less 20% and was told that the museum must pay 20% tax on my work. I am in Austria and because I am not "umsatzsteuerpflichtig" I did not charge Umsatzsteuer on the invoice.

The museum offered to send me a confirmation of the tax paid so that I will not have to pay it again. (?)

Is it my obligation to pay the Polish government 20% tax on my work although I am located in Austria?
What should I do?

Thank you in advance.


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Margreet Logmans  Identity Verified
Netherlands
Local time: 00:54
English to Dutch
+ ...
Similar situation Apr 14, 2008

You may want to read this thread:
http://www.proz.com/forum/money_matters/101401-company_overseas_deducts_taxes_from_my_earnings.html

It looks like a similar situation. Good luck!


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Jerzy Czopik  Identity Verified
Germany
Local time: 00:54
Member (2003)
Polish to German
+ ...
You have to present a "residence document" Apr 14, 2008

or something similar, issued by your local tax authority, that you are resident in another country that Poland and pay taxes there.
After presenting such confirmation no taxt deduction should apply, otherwise it is so, that Polish companies have to pay this tax. This was also confirmed to me by a German local tax authority.
And please do not mix tgis with VAT (MWSt.), as it happened in another thread mentioned here. These are diffrerent taxes. You do not have to pay Polish VAT (22%), but what they deducted is income tax.

Regards
Jerzy


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xxxMarc P  Identity Verified
Local time: 00:54
German to English
+ ...
You have to present a "residence document" Apr 14, 2008

This is interesting, Jerzy.

Would you happen to know whether, for translators who (unlike the original poster) are VAT-registered, the VAT ID number is acceptable instead to the Polish authorities/companies?

Marc


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Emily Lemon  Identity Verified
Austria
Local time: 00:54
Member
German to English
TOPIC STARTER
residence document Apr 14, 2008

Hi Jerzy,
She did request information such as :
my address
birth date
place of birth
mother & father's names
passport number
etc.

which I provided (not without hesitation). Is that not enough information?
Do you know of a link that I can refer her to?


[Edited at 2008-04-14 14:33]


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Jerzy Czopik  Identity Verified
Germany
Local time: 00:54
Member (2003)
Polish to German
+ ...
The VAT-ID is not a surrogate for this document I mentioned Apr 14, 2008

I would say it was not necessary to provide all those data.
What I was told when I asked, was simply to contact your local taxt authority, tell them you need a certificate from them, that you are German resident and pay taxes here. The authority will very probably ask what for do you need this certificate, so tell them you need it for a Polish company for such and such business.
This is to be completly separated from the VAT issue, where the VAT-ID is fully acceptable.

We do speak about different taxes here. While we do not have to pay Polish VAT and do also not charge it according to an european directive (don't ask me which), beacuse the buyer in the country, where the work is sold finally has to pay VAT on that.


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xxxMarc P  Identity Verified
Local time: 00:54
German to English
+ ...
The VAT-ID is not a surrogate for this document I mentioned Apr 14, 2008

Thanks Jerzy.

Marc


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Jerzy Czopik  Identity Verified
Germany
Local time: 00:54
Member (2003)
Polish to German
+ ...
Better wording Apr 14, 2008

Maybe I should have written "replacement", as the VAT-ID does not replace the document Polish tax authority will demand from you.

Here is a sample of such document I was once send from Poland:



CERTIFICATE OF TAX AUTHORITY OF COMPANY’S COUNTRY OF RESIDENCE

1)................................................................
Company name
2)........................................................................................
........................................................................................
........................................................................................
Full address

The Company referred to in paragraph 1) above, has its’ residence, within the meaning of the double Taxation Treaty, at the place stated in paragraph 2) above.

[Edited at 2008-04-14 16:17]


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Iza Szczypka  Identity Verified
Spain
Local time: 00:54
English to Polish
+ ...
You have an alternative, I think Apr 14, 2008

It is true that whenever a Polish institution/business contracts a job from an individual, they are obliged to withhold an advance towards the Polish personal income tax (20%). They are not obliged to do so only in the situation where at the moment of payment they can prove you are a foreign tax payer (as distinct from simply residing in a foreign country). I suppose they could offer no such proof at the time and consequently had to withhold.
To me, there is an alternative:
1. Take this certificate of tax payment that they offer and use it to reduce your tax due in Austria (on the basis of the bilateral treaty on avoidance of double taxation) - might be relatively simple, but perhaps available only at the end of fiscal year. Check with your tax authority.
2. Provide the certificate of tax residence in Austria that Jerzy is talking about, and wait for the return of tax money. Still, you must remember that the museum doesn't hold the money, they've already paid it to the tax office and will probably need to recover it before returning the money to you. A tedious job - no tax authorities like to get rid of the money they've already received.
Here http://www.senat.gov.pl/k5/dok/sejm/060/2670.pdf in page 57 you can see a bilingual certificate that is issued by the Polish tax offices to Poles wishing to avoid taxation abroad - I suppose they'll want parallel information from your tax office in Austria.
And good luck!

P.S. I swear it wasn't me who did the official translation
P.S.2. Here you have the same information in a .doc format: http://tinyurl.com/yalzkz



[Edited at 2008-04-14 20:10]


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