Corporate obligations in relation to foreign management board members

 

The rulings confirm that the remuneration received by a management board member of a Polish company for his/her function on the board may trigger PIT consequences for the Polish company, even if that company does not pay the remuneration.

 

 

The rulings deal with a situation where a management board member – sent to perform a function in a Polish limited company – is an employee of a foreign shareholder that also pays him/her remuneration. However, the costs of remuneration are ultimately charged to the Polish company managed by that board member. The costs are charged without a margin. They are reimbursed as set out in the agreements made between the companies (see: advance tax ruling of 30 January 2024, 0115-KDIT1.4011.809.2023.1.MK, KIS).

 

It is unclear whether the revenue authorities' position is shaped by the accounting treatment of the remuneration costs, i.e. with no margin, or the mere fact of charging the Polish company with the costs of remuneration of a foreign board member.

 

As the rulings deal with the very popular model of clearing the costs related to foreign board members, we recommend checking your group's remuneration policy for management board members and, if necessary, considering changing that method to minimise the risk of irregularities in tax collection in Poland. 

 

If you are looking for support in that area – contact​ us.