The energy sector in Poland is dynamically growing, in particular in the area of the offshore wind power, constituting one of the pillars of energy transformation. Pursuant to the Energy Policy of Poland until 2040, the offshore capacity is planned to grow up to 18 GW. This perspective brings significant foreign investments and increases the interest of international entities in this market sector.

However, entering the offshore sector requires a thorough legal analysis, considering, in particular, the regulations of the Polish tax law. Foreign companies investing in the Polish offshore should make sure that their activity is in full compliance with the provisions in force.

A particular attention should be paid to the possibility of creating a permanent establishment in Poland, that is, a permanent seat through which the entrepreneur conducts their business activity. This may be an office, a factory, a branch, or a workshop. Pursuant to Polish law, foreign entrepreneurs (tax residents of countries other than Poland) are obliged to pay income tax in Poland on income from operational activity if they have a foreign tax entity on the territory of Poland. Only the income that may be linked to this entity is subject to taxation. This term is regulated in detail by conventions on avoiding double taxation, which Poland has concluded over 70.

What is important is that from the point of view of the offshore sector, the provisions provide also for special forms of permanent establishment. The tax entity may be created, among others, when the company has a construction site or conducts construction or installation works for a period exceeding time limit specified in the provisions. In addition, using an installation, machinery or ships to exploit natural resources may also constitute a basis for the existence of the establishment. Consequently, a part of the entrepreneur’s income should be taxed in Poland.

If the offshore sector has been determined to result in a tax obligation in Poland, a decision is necessary as to which form the foreign entrepreneur will use to conduct business activity. Direct activity by a foreign company is also admissible, yet in practice many entities decide to establish a branch or an affiliate (most often in the form of a limited liability company). The choice of an optimal structure should be each time preceded by a legal and business analysis.