case-study28 September 202615 min read

Remote Work on a Civil-Law Contract for a Ukrainian Company While Living in Poland: JDG, Business Incubator, or PIT-36 — A Case Study

The FlexInWork team breaks down a real, anonymized consultation case: a specialist working remotely for a Ukrainian company under a civil-law civil-law contract relocated to Poland and had to choose how to legalize the income. We explain why, for services physically performed from Poland, the permanent establishment (zakład) always arises where the specialist physically works — unlike goods-trading cases, here double taxation under the treaty cannot be avoided. We compare four paths: staying on the civil-law contract and self-filing PIT-36, working under an umowa zlecenie, registering a JDG (sole proprietorship) with a choice of tax regime, and working through a business incubator. There is no one-size-fits-all recommendation — the right choice depends on income level, length of stay, and willingness to handle bookkeeping, and that is exactly what gets worked out individually during a consultation.

A specialist who works remotely for a Ukrainian company under a civil-law contract (a civil-law contract, similar to a Ukrainian ЦПХ) while physically living in Poland cannot rely on the double-taxation treaty to exempt this income from Polish tax. The reason is that the "zakład" (permanent establishment for the purpose of taxing services) in this case is always located where the specialist physically performs the work: if that is Poland, the entire income is taxed in Poland, regardless of the fact that the money is paid by a Ukrainian company to a Ukrainian card. The FlexInWork team broke down one such case from its practice — anonymized, but typical of hundreds of IT professionals and freelancers who have relocated to Poland while continuing to work for foreign clients.

The Short Version

The question remote specialists ask most often: "If the money arrives on my Ukrainian card, not a Polish account, isn't that Ukrainian income?" FlexInWork's answer: for services, what matters is not where the money is sent, but where the work is physically performed. Below is a breakdown of one case from our practice, with anonymized details: a similar situation applies to most remote employees and freelancers in Poland, but the optimal solution — self-filing a declaration, registering a JDG, or working through an incubator — depends on each person's income and planning horizon.

If your situation is similar, don't copy someone else's decision. The FlexInWork team calculates what's most advantageous for you specifically — staying on the civil-law contract, opening a JDG, or working through an incubator — individually, with concrete numbers based on your income.
📧 Email: info@flexinwork.pl
💬 WhatsApp: +48 794 323 643
✈️ Telegram: +48 794 323 643

The Case: A Civil-Law Contract with a Ukrainian Company and Relocation to Poland

The client has been in Poland since April 2026, has obtained a PESEL UKR number, and has not yet filed any other legalization documents. They work for a Ukrainian IT company under what is often called, in English, a "gig contract" — a civil-law agreement that, under Ukrainian law, is treated not as an employment contract but as a civil-code agreement (similar to a ЦПХ): payment is made for a specific volume of work completed each month, with none of the work discipline, paid leave, or sick leave that come with an employment contract. It is worth clarifying up front: the term "gig contract" is not a recognized category in Polish law at all — an English-language search for it in a Polish context mostly surfaces unrelated material about Ukraine's Diia City IT-sector regime, which uses the identical phrase for something entirely different. Under Polish tax and civil law, an arrangement of this kind is classified either as a civil-law contract (umowa zlecenie or umowa o dzieło) or, once a business is registered, as a B2B contract between a JDG and the client. These are exactly the forms discussed below.

The client's question: how to legalize the income in Poland — continue receiving money on a Ukrainian card and self-file, register a JDG (the Polish equivalent of a sole proprietorship), or use a foreign "business incubator" (also known internationally as an umbrella company, or, loosely, an Employer of Record / EOR-style arrangement for freelancers) they had read about online without fully understanding the mechanics and pitfalls.

Why Double Taxation Cannot Be Avoided for Services

The key difference between this case and goods-trading cases lies in the nature of the income itself. The double-taxation treaty between Poland and Ukraine (signed on 12 January 1993; income from independent activity is governed by Articles 14 and 18) provides that income from business activity is taxed where the "zakład" — the permanent establishment through which that activity is actually carried out — is located.

For services, the zakład is defined differently than for a goods-trading business: it is the premises and equipment (a computer, an internet connection) from which the specialist physically provides the service. If a person is present in Poland for more than 183 days and performs the work remotely from there — renting housing, using their own device to deliver services — the zakład is considered to be located in Poland. In that case, the income is taxed entirely in Poland and is no longer taxable in Ukraine — there is no double taxation as such, but there is also no choice of where to pay. This is fundamentally different from cases where the business itself (a warehouse, staff, deal-making) physically remains in Ukraine — there, the treaty exemption applies. For services physically performed from Poland, no such exemption exists.

From What Day Does the Obligation to Pay Tax in Poland Arise

The 183-day threshold marks the point at which a person becomes a Polish tax resident with unlimited tax liability. But for services performed from Poland, it's important to understand: once a specialist crosses this threshold in the current tax year, income from that activity is taxed in Poland from the very first day that income was received in the current year — not only from day 184 onward. In other words, the count doesn't start "from the moment I decided to stay," but is based on the threshold being crossed over the calendar year as a whole.

The practical takeaway: a specialist who has already exceeded, or will soon exceed, 183 days of presence should proactively contact their client company and explain the situation — that the work is physically performed from Poland, and under the treaty, the income is taxable here — to avoid having tax withheld simultaneously in both Ukraine and Poland.

The annual declaration for this income — PIT-36 — is filed within a fixed window: from 15 February to 30 April of the year following the reporting year. If the income was already partially taxed in Ukraine before Polish residency was established, one of two official methods for eliminating double taxation under the treaty applies: "wyłączenie z progresją" (exemption with progression — the foreign income is not taxed again but is taken into account when determining the tax rate on Polish income) or "odliczenie proporcjonalne" (proportional deduction — tax paid abroad is credited against the Polish tax due). Which method applies in a given situation depends on the type of income and the treaty's terms — it is not a taxpayer's free choice.

A separate technical detail is currency conversion: income received in a foreign currency (such as the hryvnia or the dollar) is converted into złoty using the average NBP (National Bank of Poland) exchange rate on the last working day preceding the day the income was received, not the rate on the date the declaration is filed.

Legalization Paths: Civil-Law Contract, Umowa Zlecenie, JDG, or Incubator

Before comparing the main options, one more alternative deserves a brief mention: "unregistered business activity" (działalność nierejestrowana) — a Polish regime that lets very small-scale activity operate without formal business registration, as long as monthly revenue stays under a set low threshold. In practice this ceiling is far too low for most remote IT or consulting income and is really intended for occasional, side-income situations, so for a specialist earning a full-time remote salary it is rarely a realistic path — but it is worth knowing the term exists, since it comes up often in Polish-language comparisons of "JDG vs. incubator vs. other options."

The client had several options, each with its own cost and risk logic. The first was to stay on the civil-law contract with the Ukrainian company, receive gross income (without Ukrainian taxes withheld, by agreement with the client), and independently calculate and pay monthly advance payments toward Polish income tax, filing a PIT-36 declaration at year-end. This option doesn't require registering a business, but does require discipline in monthly calculations — usually handled by an accountant.

The second was to work under an umowa zlecenie (a civil-law contract of mandate) directly or through an intermediary, without registering one's own business. Income under an umowa zlecenie is taxed on the progressive PIT scale — 12% up to a threshold of 120,000 złoty per year and 32% on the amount above that. A separate nuance worth knowing for specialists under 26: the "ulga dla młodych" relief applies — a full PIT exemption up to an established annual limit — and for students under 26 working under an umowa zlecenie, ZUS contributions are not withheld at all. For many beginning freelancers, this is the lowest-threshold entry into legal work, but as income grows, it quickly loses ground to a JDG on overall tax burden.

The third was to register a JDG (jednoosobowa działalność gospodarcza, the Polish equivalent of a sole proprietorship) and switch to a business-to-business (B2B) contract with the client rather than acting as a private individual. Here one can choose a tax regime: ryczałt (a fixed percentage of revenue with no deduction for expenses; for most IT services the rate is usually around 12%, but some consulting services — depending on the exact PKD business-activity classification — qualify for a reduced 8.5% rate), taxation under general rules (12%/32% on net profit), or the flat linear tax (19% on net profit). IT specialists who transfer intellectual property rights to code they create to the client should separately consider IP Box — a preferential 5% rate on income from qualified intellectual property rights instead of the JDG's standard rates; eligibility depends on keeping separate records for such income and on the activity being recognized as creating a protected result. The choice of regime directly affects the amount of mandatory ZUS contributions and whether business expenses (rent, equipment, a car) can be deducted to reduce the tax base. A detailed calculation of which regime is more advantageous for your specific income and expense structure is something the FlexInWork team provides when registering a JDG, along with ongoing monthly bookkeeping.

The fourth was working through a foreign "business incubator" — a structure known internationally under several overlapping names, including umbrella company and (loosely) Employer of Record (EOR) for freelancers, though the underlying mechanics differ slightly from a classic EOR employment model. It receives payments from the foreign client into its own account and then forwards them to the specialist for a fee (in the case discussed, around 6–9% of the amount withdrawn plus a fixed monthly fee; some providers advertise effective rates in a somewhat wider 6–9.6% range depending on how intellectual-property transfer is structured). This is a legal instrument, operating on the basis of civil-law contracts (umowa zlecenie or umowa o dzieło) between the specialist and the incubator, but it does not exempt one from paying ZUS contributions and income tax — the fundamental difference from a JDG or the civil-law contract lies in the payment structure and contractual relationships, not in any exemption from taxes as such.

As a rough guide for choosing between a JDG and an incubator: with a stable income of roughly 10,000–12,000 złoty per month, registering your own JDG is almost always more advantageous in terms of overall tax burden, despite the cost of bookkeeping. An incubator, by contrast, is more often justified with irregular income, for a student under 26, or when a specialist is only testing a niche and isn't ready to register a business right away. This is a rule of thumb, not a universal rule — the break-even point depends on the chosen JDG tax regime and the specific incubator's commission.

ZUS Contributions: How Much a JDG Costs in the First Years

The amount of mandatory ZUS contributions for a JDG depends on the chosen tax regime and on how many years the business has been operating. For the first 6 months, a relief period applies ("ulga na start"), during which only the health-insurance contribution is paid. For the following two years, a reduced rate of social contributions applies ("mały ZUS" at the start) — covering both health and social insurance together — after which contributions move to the full amount. The final figure depends on the chosen tax regime: under ryczałt, the health-insurance contribution is fixed and depends on the annual income bracket (there are several thresholds); under the linear tax and general rules, health insurance is calculated as a percentage of income. An exact calculation of the total tax burden under each of the three scenarios over the first two to three years is something worth modeling in advance, before registration, not after the fact.

Why a Power of Attorney and a "Zakład in Ukraine" Don't Work in This Case

During the consultation, the FlexInWork team cited another real case from its practice for comparison: an entrepreneur with a goods warehouse in Ukraine who was able to demonstrate that their business's zakład was located in Ukraine (a power of attorney for an operating manager, a warehouse, deal-making — all physically in Ukraine), and on that basis the income remained exempt from Polish tax. For a remote specialist providing IT or consulting services, this scheme does not work: the tool of earning is the specialist's own computer and internet connection, physically located in Poland. In this case, the zakład is inseparably tied to the physical location of the person performing the work, and no power of attorney changes that. The distinction between these two types of business — goods and services — is something worth understanding before deciding on a strategy, not after.

There is also a second, less obvious permanent-establishment risk that is often overlooked, and is worth flagging especially for IT specialists who hold any authority to negotiate or sign contracts on behalf of their foreign employer or client: if a person working from Poland has the power to conclude agreements in the name of the foreign company, this can create a corporate permanent-establishment risk for that foreign company itself, not only a personal tax obligation for the individual. In that scenario, the foreign employer could in principle become liable for Polish corporate income tax (CIT) on the portion of its activity attributable to that Polish-based presence. This is a separate question from the specialist's own PIT liability discussed above, and it is one more reason to sort out the legal structure of the relationship early rather than relying on an informal civil-law contract indefinitely.

Opening a Sp. z o.o. Instead of a JDG: When It Makes Sense

Separately, the consultation covered the option of opening a Polish company (a Sp. z o.o., the equivalent of a Ukrainian LLC) instead of a JDG. A company with two founders and no employees does not pay ZUS contributions for the founders, but does pay corporate income tax (9% for new and small companies with turnover under 2 million euros, otherwise 19%), and withdrawing money to the owner is a separate transaction — either as dividends (with an additional tax) or as salary to an employed director (which then brings in ZUS and income tax, as for a regular employee). A company also offers more opportunities for deducting business expenses, including a company car, but requires more complex bookkeeping and generally higher service costs than a JDG. Whether this form suits you is a question worth calculating with actual numbers rather than in theory; the FlexInWork team also assists with Sp. z o.o. registration, should you ultimately choose this form.

Bank Oversight and Data-Sharing Between Ukraine and Poland

A separate practical question that concerns many people: if you continue receiving money on a Ukrainian card and only spend part of it on daily needs in Poland, how traceable is this? There's no definitive answer here — but a noticeable trend in recent years is that banks in the European Union are gradually expanding data-sharing with tax authorities and with each other, including information on year-end account balances. Relying on the assumption that income simply won't be noticed is a risky strategy: the right approach is not to hide income, but to declare it correctly and, where the treaty applies, legally avoid double payment of tax — not the tax itself.

What to Do If Your Situation Is Similar

The choice between a civil-law contract with self-filed PIT-36, registering a JDG, or working through an incubator depends on the amount of income, plans for legalization in Poland (a residence card, a mortgage, or leasing in the future all require proof of legal income), and how many days of presence have already accumulated in the current year. A general article can show the logic of the choice, but an exact cost calculation for each scenario at your specific income level is something that gets worked out individually.

Book a consultation with FlexInWork's specialists to get a calculation of all four scenarios tailored to your situation — how much you'd pay in taxes and ZUS contributions under each option in the first, second, and subsequent years, and which option is easiest to implement given your current contract.
📧 Email: info@flexinwork.pl
💬 WhatsApp: +48 794 323 643
✈️ Telegram: +48 794 323 643

Want to work through your specific situation? Write to us, and we'll find a convenient time for a consultation:

📧 Email: info@flexinwork.pl
💬 WhatsApp: +48 794 323 643
✈️ Telegram: +48 794 323 643

FlexInWork is a company that supports business and legalization for Ukrainians in Poland: from registering a JDG and a Sp. z o.o. to bookkeeping, tax declarations, and residency questions. Full catalog of business services — flexinwork.pl/en/b2b/, for individuals — flexinwork.pl/en/b2c/.

Frequently Asked Questions

If the money arrives on my Ukrainian card rather than a Polish account, do I need to pay tax in Poland?

Yes, if you are a Polish tax resident (more than 183 days of presence in a year, or your center of vital interests is here) and you physically perform the work while in Poland. For services, what matters is not which account, in which country, receives the money, but where the service is physically provided — that is what determines the location of the zakład. Exactly how to structure and declare this kind of income in your specific situation is something we can discuss during a FlexInWork consultation.

How does a civil-law contract differ from an employment contract in terms of taxes in Poland?

Under an employment contract, income from employment is only formally subject to double taxation — rules for eliminating double taxation apply, and actual withholding in Ukraine may be handled automatically by the employer. Under a civil-law civil-law contract (similar to a ЦПХ), a different logic applies: if the zakład is recognized as being in Poland, the entire income is taxed only under Polish income tax, and the Ukrainian side simply pays the fee without withholding Ukrainian taxes — by agreement between the parties. This difference significantly affects how the relationship with the client is structured; the details depend on the wording of the specific contract.

How do you determine that the "zakład" for providing services is physically located in Poland?

The zakład is the place from which the service is actually provided: the premises (rented housing, an office) and the equipment (a computer, communication tools) used to perform the work. If a specialist lives in Poland and the entire work process — from receiving an assignment to delivering the result — takes place here, the zakład is considered located in Poland regardless of the specialist's nationality or the client's country of registration. This is fundamentally different from a goods-trading business, where the zakład is determined by the location of the warehouse and management, not by where the owner physically is.

Can I work on a civil-law contract without registering any business activity in Poland?

Yes, you can continue working under a civil-law contract as a private individual, without registering a JDG, and independently (or with an accountant's help) calculate monthly advance income-tax payments and file an annual PIT-36 declaration by 30 April of the following year. This doesn't require costs for business registration and ZUS service, but does require discipline in monthly calculations and doesn't allow you to deduct expenses to reduce the tax base, unlike a JDG under general rules or the linear tax.

What's the difference between ryczałt, the linear tax, and general rules for a JDG?

Ryczałt is a fixed percentage of revenue (around 12% for most IT services) with no deduction for expenses: it's paid on the full amount of income regardless of costs. General rules are a progressive scale of 12%/32% on net profit (income minus expenses), while the linear tax is a fixed 19% on net profit. The choice depends on the share of business expenses (rent, equipment, transport) relative to income: the higher the expenses, the more advantageous general rules or the linear tax usually become compared to ryczałt. Which option is more advantageous in your case is a matter of an exact calculation during a consultation, not a general rule.

What is a business incubator and how does it differ from a JDG?

A business incubator is a structure that receives payments from a foreign client into its own account and forwards them to the specialist for a fee, structuring the relationship through civil-law contracts (umowa zlecenie or umowa o dzieło). Contrary to popular belief, an incubator does not exempt you from paying income tax and ZUS contributions — the difference from a JDG lies in the contract structure and in the fact that the specialist doesn't register their own business or file their own returns, with the incubator handling those functions for a separate fee. Whether this is more advantageous than registering your own JDG at your income level is something worth comparing in numbers before choosing.

Does a high annual income affect the amount of mandatory ZUS contributions?

Yes, for health insurance under ryczałt, the contribution amount depends on several annual income thresholds — the higher the income, the higher the fixed health-insurance contribution, although it remains fixed within its own bracket rather than a percentage of income. Exceeding a certain annual income from all sources also changes the applicable contribution rate. Exact thresholds and amounts are updated regularly, so it's best to calculate current figures for your expected income right before registering the business.

What happens if I keep receiving income on a Ukrainian card and don't declare it in Poland?

The risk is that banks in the European Union are gradually expanding data-sharing between each other and with tax authorities, including information on account balances, and this isn't always predictable in advance — there are known cases where financial services began transmitting such data to the Polish tax authority without prior notice to clients. If income isn't declared and the tax authority later asks about the source of funds, you'll not only have to pay the tax retroactively but also explain the delay. Poland has a mechanism for voluntary disclosure of a violation ("czynny żal") — coming forward on your own before an audit begins can reduce or fully eliminate a penalty, but this shouldn't be relied on as a strategy: the right approach is to declare income on time, not to look for ways to hide it.

Who can join a business incubator and under what conditions?

Practically anyone legally present in Poland can work through a business incubator, regardless of nationality — there are no special qualification or industry requirements. The incubator signs a civil-law contract (usually an umowa zlecenie or umowa o dzieło) with the specialist, receives payments from the client into its own account, and forwards them minus a commission. This doesn't require registering your own business, but it also doesn't exempt you from income tax and ZUS contributions — it's best to check the specific terms of individual incubators, and whether this option suits you, during a consultation.

How do you join a business incubator and what documents are needed?

The process usually comes down to signing a contract directly with the incubator's operator: you'll need a document legalizing your stay in Poland (a PESEL, a residence card, or another status), a passport, and details about the planned client and volume of work. Despite what the name "incubator" might suggest, there's usually no strict competitive selection process — it's more of an intermediary financial-contractual structure than a startup-support program in the classic sense. Terms (commission size, minimum amounts, transfer speed) vary significantly between operators, so comparing specific options is worth doing individually.

Who can register a JDG in Poland?

A JDG can be registered by a Polish citizen as well as by a foreigner with an appropriate legal residence status — in particular, holders of a residence card with the right to work, participants in special programs (including simplified regimes for Ukrainians under current legislation), and in some cases persons with other statuses granting the right to run a business. The exact list of eligible grounds changes periodically, so before registering, it's worth confirming that your specific residence status entitles you to this — that's the first thing the FlexInWork team checks when registering a JDG.

What is a JDG in Poland, in plain terms?

A JDG (jednoosobowa działalność gospodarcza) is the standard Polish form of individually run business — the rough equivalent of a sole proprietorship or sole trader status in other countries. It is registered through a simple online procedure, gives the holder a NIP tax number and REGON statistical number, and lets them invoice clients as a business (B2B) rather than as a private individual. It is the most common vehicle used by IT specialists and other remote professionals in Poland who want to bill foreign clients directly rather than through an intermediary.

What are the basic requirements for becoming self-employed in Poland as a foreigner?

In broad terms: a legal basis for staying and, where applicable, working in Poland; a registered address that can be used for correspondence (a rented apartment or a virtual office); a bank account for business transactions; and, for most service activities, no formal licensing beyond standard tax and ZUS registration. The exact combination of documents needed depends heavily on your specific residence status, which is exactly the kind of detail worth confirming case by case rather than assuming from a general list.

Is there a way to earn and legalize online income in Poland without opening a full business straight away?

Yes — besides a JDG, the two lower-commitment options already discussed above are staying on a civil-law contract with self-filed PIT-36, or working through a business incubator / umbrella-style structure that handles invoicing and compliance for a fee. There is also, in principle, the "unregistered activity" (działalność nierejestrowana) regime for very low, occasional income below a set monthly threshold, though this ceiling is usually too low to cover a full-time remote income. Which of these fits best depends heavily on how stable and how large the income is.

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