PIT Exemption, Abolition Relief, and Judicial Pitfalls in 2026
You return from a contract, and your bank account shows wages in dollars, pounds, or euros. Can Poland tax that income — and if so, how much will you actually pay?
The answer depends on several factors, none of them obvious. What matters is not just the flag your vessel flies, but above all where the shipowner or operator maintains its effective management, whether Poland has a double tax treaty (DTT) with that state, which method of elimination the treaty prescribes, and what kind of vessel you work on. A container ship, bulk carrier, or tanker is one thing. An FPSO, cable layer, or seismic vessel is an entirely different tax story.
Polish rules on seafarer taxation offer no simple answers. The PIT Act, international treaties, the MLI Convention, Supreme Administrative Court (NSA) case law — all of this creates a landscape in which the same seafarer, on the same ship, may owe tax in Poland or be fully exempt, depending on how the return is filed.
Two Paths, One Decision
Polish tax law gives seafarers two distinct options for reducing or eliminating tax on foreign income. The choice between them is not a formality — it is a strategic decision that determines whether you pay zero or several thousand zlotys.
PIT Exemption (Article 21(1)(23c) PIT Act) — full income tax exemption. It applies to seafarers working on vessels flying an EU or EEA flag, used for the carriage of cargo or passengers in international shipping, provided at least 183 days of work in the tax year. Sounds straightforward — but the devil is in the detail. The amended version of this provision (referring to citizenship rather than flag) is still awaiting a European Commission decision on state-aid compatibility. Until then, the older version, under which the vessel’s flag is decisive, remains in force.
Abolition Relief (Article 27g PIT Act) — does not exempt income from tax, but allows a deduction equal to the difference between the tax computed under the credit method and the tax computed under the exemption-with-progression method. For seafarers working outside the land territory of any state, the relief is not subject to the PLN 1,360 cap (Article 27g(5)) — which in many cases can lead to a significant reduction or even elimination of Polish tax, although this is not automatic and depends on the specific income figures.
The relief requires that foreign income be settled under the proportional credit method (Article 27(9) or (9a) PIT Act). This method applies where the applicable DTT so provides — or where Poland has no treaty at all with the relevant state (a “treatyless” situation).
Which route to choose? That depends on the flag, the operator, the waters, the tax convention, and the documentation at hand. The Provincial Administrative Court (WSA) in Gdańsk, in its judgment of 18 February 2026 (I SA/Gd 951/25), demonstrated how costly a mistake at this stage can be. A seafarer working on a Cyprus-flagged vessel operated by a UK enterprise applied for a reduction of advance tax payments, citing the PIT exemption under Article 21(1)(23c) rather than the abolition relief under Article 27g. The court did not examine whether abolition relief would have been available — it held that the application defines the scope of the proceedings, and the tax authority is not obliged to search ex officio for alternative legal bases.
Is Payment of Tax Abroad a Condition for Abolition Relief?
This is one of the most contested issues in seafarer taxation — and one on which case law is not uniform.
Tax authorities have long maintained that actual payment of tax abroad (or at least the existence of a tax liability in the other state) is a precondition for the application of a DTT — and consequently a precondition for the right to abolition relief.
The WSA in Gdańsk, in its judgment of 4 February 2026 (I SA/Gd 935/25), went even further in this direction. Dismissing a claim by a seafarer on a seismic vessel, the court did not merely note that the taxpayer had not paid tax in the United Kingdom. It held that a DTT applies only where there is an actual conflict of tax claims between two states — and since the seafarer had not demonstrated any tax liability whatsoever in the UK, there was no conflict to resolve and the treaty itself was inapplicable. The court expressly stated that “the application of the method of avoidance of double taxation is not possible where the taxpayer has not paid tax abroad, and the payment of tax abroad is one of the overriding preconditions for the taxpayer to benefit from the so-called abolition relief.”
The Supreme Administrative Court (NSA), in its judgment of 15 December 2025 (II FSK 785/22), delivered in a seven-judge panel, took the opposite view. The NSA held that neither the existence of a tax liability in the other contracting state nor the actual payment of tax conditions the applicability of a DTT. It is sufficient that the income “may be taxed” within the meaning of the convention. The NSA simultaneously issued a signalling order (postanowienie sygnalizacyjne) to the Minister of Finance, pointing to the divergence of positions between the Ministry and the regional tax administration.
This divergence has fundamental practical consequences. For a seafarer whose income meets the treaty criteria (e.g., work on a vessel operated in international transport by a Norwegian enterprise), the question of whether Norway actually taxes that income may prove irrelevant to the right to abolition relief in Poland. However, in a treatyless situation (no DTT), the Minister of Finance’s general interpretation (No. DD4.8201.1.2019) continues to require actual payment of tax as a condition for the relief.
The legal position on this question remains dynamic and requires case-by-case analysis.
Offshore Seafarers — A Separate Risk Category
If you work on an FPSO, FSO, cable layer, pipelayer, seismic vessel, or drilling unit — your tax position is materially different from that of a colleague on a container ship. And this is entirely independent of the case-law divergence described above, because the offshore problem lies elsewhere.
For several years, tax authorities have consistently treated specialist vessels as not operated in international transport. In 2026, administrative courts confirmed this position at two levels.
The NSA, in its judgment of 29 January 2026 (II FSK 702/23), unequivocally held that an FPSO — designed for the extraction, storage, and transhipment of crude oil — does not participate in international transport. The court relied on the ordinary-language meaning of “transport”, holding, consistently with the tax authorities, that it denotes the carriage of persons and goods, not specialist operations in the course of which some movement of persons or goods incidentally occurs. The fact that an FPSO tranships crude onto shuttle tankers does not make it a means of transport — its primary purpose is extraction and processing, not carriage. The taxpayer’s cassation appeal was dismissed.
A week later, the WSA in Gdańsk, in its judgment of 4 February 2026 (I SA/Gd 935/25), dismissed a claim by a seafarer on a seismic vessel, confirming the identical classification — geophysical surveying of the seabed does not constitute international transport.
It is critical to understand that the taxpayer-favourable NSA judgment in case II FSK 785/22 does not alter the position of offshore seafarers on the transport-qualification question. Even if actual payment of tax is not required for the application of a DTT, the right to abolition relief still requires the prior satisfaction of the treaty criteria, including the operation of the vessel in international transport. If the vessel is not in transport, the convention does not apply to the income under the seafarer provision (Article 14(3) of the Polish-Norwegian Convention, Article 14(3) of the Polish-UK Convention, and their equivalents in other DTTs), and the question of tax payment abroad does not arise at all.
For offshore seafarers, this means that:
- the source state becomes the state in whose waters the unit actually operates — Ghana, Brazil, Angola, Guyana — not Norway or the United Kingdom,
- in a treatyless situation (no DTT with the state of operational waters), the right to abolition relief depends on whether tax was actually paid there — as confirmed by the NSA in judgment II FSK 702/23, where a seafarer on an FPSO operating in Ghanaian waters could benefit from the relief only in respect of the portion of income actually taxed in that country,
- the mere fact of working “outside the land territory” of any state is not sufficient — Article 27g(5) removes the monetary cap on the relief, but does not create a freestanding right to it.
A detailed discussion of the latest case law can be found in our article on tax disputes concerning seafarer settlements.
When Is Seafarer Income Tax-Exempt?
The exemption under Article 21(1)(23c) of the PIT Act covers income of seafarers — EU or EEA citizens — earned from work on seagoing vessels flying the flag of an EU or EEA state, used for the carriage of cargo or passengers in international shipping, provided such work was performed for a total of at least 183 days in the tax year. The exemption does not cover work on tugboats (where less than 50% of their working time consisted of maritime carriage) or on dredgers (likewise).
A condition for claiming the exemption is the submission to the tax office — no later than the deadline for filing the annual return — of a certificate from the shipowner or crewing agency containing the seafarer’s details, the number of days worked, the amount of income, and the shipowner’s details (Article 21(35)(2) PIT Act). The absence of this certificate can, in itself, determine a refusal — regardless of whether the remaining conditions are met.
The WSA in Gdańsk judgment of 18 February 2026 (I SA/Gd 951/25) provides a cautionary tale in yet another dimension. A seafarer working on a Cyprus-flagged vessel, operated by a UK-based enterprise, cited this exemption in his application for a reduction of advance tax payments. The court held that he had not substantiated the conditions for the exemption — and when counsel attempted to invoke abolition relief under Article 27g only at the appeal and court-action stage, the court held that the tax authority was not obliged to examine, of its own motion, alternative legal bases exceeding the scope of the application. The correct choice of legal basis at the very outset of proceedings is therefore decisive.
The tax authorities not infrequently refuse the exemption to seafarers working under EU/EEA flags on units such as platforms, cable ships, or research vessels — on the grounds that they are not “used for the carriage of cargo or passengers”.
Treatyless Situations — Where Poland Has No DTT with the Flag State
For states with which Poland has not concluded a DTT (e.g., Antigua and Barbuda, Barbados, Liberia), the proportional credit method applies by default. In a treatyless situation — unlike one governed by a convention — the right to abolition relief requires actual payment of tax abroad (Minister of Finance General Interpretation No. DD4.8201.1.2019). If the flag state or the state of effective management does not require the seafarer to pay tax, the full amount of tax is due in Poland and abolition relief is unavailable.
The NSA confirmed this principle in practice in its judgment of 29 January 2026 (II FSK 702/23). A seafarer working on an FPSO in Ghanaian waters — Ghana being a state with which Poland has no DTT — was entitled to abolition relief only in respect of the portion of income on which he had actually paid tax in Ghana. For the remainder, the NSA held that tax was due in Poland on general principles, with no entitlement to the relief.
This is worth bearing in mind given the growing popularity of “flags of convenience” — such as Liberia, the Marshall Islands, and Panama — among European shipowners.
What We Do for Seafarers
Kancelaria Skarbiec offers seafarers a full range of tax and litigation services — from consultations to representation before the Supreme Administrative Court.
Tax returns and planning: consultations on PIT obligations, tax analyses and opinions on Polish tax liabilities, preparation of annual PIT returns based on source documents, preparation of applications to the Head of the Tax Office for a reduction of advance PIT payments — including selection of the correct legal basis (Article 21(1)(23c) exemption or Article 27g abolition relief), preparation of applications for individual tax rulings.
Proceedings and disputes: analysis of tax-authority communications and preparation of responses during verification activities or tax proceedings, preparation of appeals against decisions, preparation of complaints to administrative courts (WSA/NSA), representation of the taxpayer before first- and second-instance authorities and before the WSA and NSA.
The number of verification activities targeting seafarers is growing year on year — including summonses to correct tax returns resulting in additional tax liabilities. Experience shows that the explanations submitted in the initial phase of proceedings often determine their outcome. The earlier a seafarer obtains professional assistance, the greater the room for manoeuvre.
