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A secondment and a business trip concern in polish law two different definitions. The first one is regulated in art. 775 of the Polish Labor Code. According to §1 of Labor Code, an employee performing an official task at the employer's request outside of the place where the employer's registered office is located or outside the permanent workplace, employer should also cover payments for expenses related to this trip. In this case, the employee temporarily performs assigned task for up to 3 months.
The primary obligation of the employer is paying benefits for business trips, such as daily mission allowances, repayment of the travel expenses, and accommodation. These payments are usually tax and social insurance contributions exempt. In this case, rates for daily subsistence allowance depend on the country to which the employee was departed. Rates in some countries are below 50 EUR, for example, Belarus and Russia 48 EUR, Ukraine and Estonia 41 EUR.
Payment of subsistence allowance and other charges related to business trip is beneficial in taxation - they are exempt from income tax and are not a basis to draw up the insurance premium rates. The main requirement is the official business trip of the employee.
In contrast to business trips, secondment may take up to 24 months. The employee is not entitled to repayments for daily mission allowances and other expenses. Therefore, if an additional remuneration or other expenses related to the trip are returned - this is the taxable income of the employee.
Principles of sending employees to countries outside the European Union are regulated in article 291 of the labor code. According to this provision, a contract of employment with a person sent to work in the area of a non-EU country for a period for more than one month should specify the time of work abroad and the currency in which the salary will be paid to the employee. An employee who is sent outside the EU may also be subject to social insurance in Poland, but only if a Treaty on social insurance between these countries is concluded.
Documents required for secondment of foreigner:
- certificate A1 (if social insurance is paid in Poland during the period of delegation on the EU territory),
- lease agreement;
- employment contract with a minimum salary of the country the employee is sent;
- an employee must be insured for at least 1 month before a secondment;
- the type of activity carried out on the territory of that country t should be similar to the work performed by the employer in Poland.
Therefore, it is so important to know when we are dealing with a business trip, and when with secondment. Incorrect identification causes the risk of debt on advance payments for personal income tax for the amount paid during secondment. The situation is similar in the case of social insurance of the employee.