Seafarer on an FPSO and Abolition Relief – NSA Judgment of 29 January 2026 (II FSK 702/23)
The Supreme Administrative Court (NSA) in its judgment of 29 January 2026 (II FSK 702/23) dismissed the cassation appeal of a seafarer working on an FPSO unit, denying him entitlement to abolition relief. The reasoning is unequivocal: a floating production platform does not participate in international transport – and without international transport there is no relief.
The problem is not limited to FPSO platforms alone (Floating Production, Storage and Offloading). Seafarers employed on FSO units (Floating Storage and Offloading), FLNG units (Floating Liquefied Natural Gas), pipe-laying vessels, cable-laying vessels, drilling units (drillships, jack-up rigs) and seismic or hydrographic research vessels find themselves in an identical legal position. As described in our article on the verification of seafarers’ settlements, all vessels atypical for the tax apparatus are treated as not operated in international transport. The NSA judgment confirms that the courts share this view.
What Were the Facts of Case II FSK 702/23?
Mr T. L. – a Polish tax resident – worked in 2017 on board the vessel “J.”, an FPSO unit operated by a Norwegian enterprise in Ghanaian territorial waters. An FPSO is a floating production, storage and offloading system – connected by pipelines to subsea wellheads on the continental shelf, extracting crude oil, performing preliminary purification, and offloading onto shuttle tankers.
The taxpayer was convinced that his income was subject to Art. 14(3) of the Polish-Norwegian Convention, which allows the taxation of a seafarer’s remuneration in the state whose enterprise operates the vessel in international transport. Since Norway – by virtue of Art. 22(1)(d) of the Convention – exempts such income from tax, the proportional credit method (Art. 27(9) of the PIT Act) should apply, opening the door to abolition relief under Art. 27g of the PIT Act.
The Director of the Tax Administration Chamber in Gdańsk and the WSA in Gdańsk (judgment of 14 February 2023, I SA/Gd 1012/22) denied the taxpayer entitlement to the relief. The NSA upheld their position.
Does an FPSO Participate in “International Transport”?
This is the central legal issue. The Polish-Norwegian Convention in Art. 3(1)(f) defines “international transport” as any transport by seagoing vessel – except where the vessel is operated solely between places in one Contracting State. However, the Convention does not define the term “transport” itself.
Art. 3(2) of the Convention directs that recourse be had to domestic law. Neither the PIT Act nor the Tax Ordinance Act defines the term. The NSA therefore applied linguistic interpretation: “transport” means the carriage of persons and cargo, where movement constitutes the principal purpose of the activity.
The court’s conclusion: where the principal purpose of a vessel’s activity is not the movement of persons or cargo but the performance of specialist operations – extraction of oil and gas, seismic research, laying of subsea cables – the fact that some movement of persons and goods incidentally occurs does not render the activity transport. Movement is merely ancillary to the principal purpose.
Why Did the Classification as Other Cargo Ship Not Help?
The appellant argued, citing the SOLAS Convention and Regulation (EC) No 391/2009, that his vessel was classified in the IMO system as an other cargo ship. Since it was a “cargo” vessel, he reasoned, it was by definition a transport vessel.
The NSA responded precisely: this classification merely indicates that the unit is not a passenger vessel. It does not determine transport purpose – and the FPSO’s constructional design and the tasks it actually performed (extraction, purification, storage and offloading of crude from subsea deposits) categorically contradicted the transport thesis.
This is significant for the entire offshore industry: a vessel’s registration or classification alone does not determine its tax status. What is decisive is the actual nature of the tasks performed.
Where Does the Income of an FPSO Seafarer Arise?
Since Art. 14(3) of the Polish-Norwegian Convention does not apply, the place where income arises is not Norway (the shipowner’s registered office) but the territory of the state in whose waters the seafarer actually worked – in this case, Ghana. The fact that the shipowner is a Norwegian enterprise is immaterial.
This consequence surprises many seafarers: you work for a Norwegian company, but for tax purposes your income “arises” in the waters of Ghana, Brazil, Angola, Guyana or another state on whose continental shelf or in whose exclusive economic zone the FPSO operates.
Poland has not concluded a double taxation treaty with Ghana. The income is therefore subject to taxation under Art. 27(9) and (9a) of the PIT Act – i.e., the proportional credit method – exactly as in any treaty-free situation.
Is the Relief Available Where the Seafarer Did Not Pay Tax Abroad?
Here the judgment is particularly instructive. The taxpayer could apply abolition relief – but only in respect of the portion of income on which he actually paid tax in Ghana. No relief was available for the remainder.
The mechanism: Art. 27g of the PIT Act allows the deduction of the difference between tax calculated under the proportional credit method (Art. 27(9)) and tax calculated under the exemption with progression method (Art. 27(8)). For this calculation to work, there must be foreign income settled under Art. 27(9).
The NSA, citing its judgment of 15 November 2022 (II FSK 806/20), held: bearing no tax burden whatsoever would violate the constitutional principle of universality of taxation (Art. 84 of the Constitution). Income is taxable at least once – in Poland, under general rules.
Is Differentiation of Seafarers’ Status by Vessel Type Discriminatory?
The appellant raised 27 grounds of complaint, citing the EU Charter of Fundamental Rights, the European Convention on Human Rights, the Treaty on European Union, the Vienna Convention on the Law of Treaties and the in dubio pro tributario principle of Art. 2a of the Tax Ordinance Act.
The NSA was not persuaded. Art. 14(3) of the Polish-Norwegian Convention employs a clear criterion – operation in international transport. Entities in different factual situations may be treated differently – this is not discrimination but a consequence of differences in fact.
The taxpayer’s procedural rights – the right to fair tax proceedings, access to files, the right to appeal a decision and to lodge a complaint with the administrative court – were fully guaranteed.
NSA Case Law – Established and Uniform
The judgment of 29 January 2026 is the latest link in a chain. The NSA cited its earlier rulings of 27 February 2019 (II FSK 463/17), 3 August 2022 (II FSK 2331/20), 15 November 2022 (II FSK 806/20), and 18 March 2025 (II FSK 1304/23 and II FSK 1460/23). A detailed discussion of selected rulings can be found in our article on tax disputes concerning seafarers’ settlements.
All confirm the same proposition: vessels performing specialist tasks – FPSOs, FSOs, FLNGs, cable-layers, pipe-layers, drillships, research vessels – do not participate in international transport within the meaning of the Polish-Norwegian Convention. The prospects for a change in this line without legislative intervention are negligible.
What Should a Seafarer Working on an Offshore Unit Do?
The practical conclusions of this judgment concern thousands of Polish seafarers and their tax advisors.
Determine the correct source state for your income. This is not Norway (the shipowner’s registered office) but the state in whose waters the unit operates – Ghana, Brazil, Angola, Guyana. That state determines the tax regime and the need to verify whether Poland has concluded a treaty with it.
Retain documentation. As we discuss in our article on the verification of seafarers’ settlements – employment contracts, the seafarer’s discharge book, ship certificates and certificates of employment are the foundation. For offshore units, it is additionally advisable to hold documentation confirming the area of operations and the nature of the tasks performed by the vessel.
Consider correcting past returns. Seafarers who previously settled their tax on the assumption that work on an FPSO constitutes international transport should consider filing corrections. A voluntary correction filed before the initiation of tax control allows the avoidance of fiscal criminal sanctions. Bear in mind the limitation periods for tax liabilities – for the 2017 tax year, the period expired in principle at the end of 2023, unless suspended or interrupted.
Do not abandon the defence of your rights. Every case has individual facts. The NSA judgment closes the door for classic FPSOs, but a seafarer whose unit actually carried cargo between ports of different states may have a stronger position. An analysis of the specific circumstances – vessel type, area of operations, nature of tasks – is key.
Legal basis: NSA judgment of 29 January 2026, case no. II FSK 702/23; Art. 27(9), Art. 27g of the Personal Income Tax Act of 26 July 1991 (consolidated text: Journal of Laws 2021, item 1128, as amended); Art. 3(1)(f), Art. 14(3), Art. 22(1)(d) of the Convention between the Republic of Poland and the Kingdom of Norway for the avoidance of double taxation (Journal of Laws 2013, item 680).
Robert Nogacki – licensed legal counsel (radca prawny, WA-9026), Founder of Kancelaria Prawna Skarbiec.
There are lawyers who practice law. And there are those who deal with problems for which the law has no ready answer. For over twenty years, Kancelaria Skarbiec has worked at the intersection of tax law, corporate structures, and the deeply human reluctance to give the state more than the state is owed. We advise entrepreneurs from over a dozen countries – from those on the Forbes list to those whose bank account was just seized by the tax authority and who do not know what to do tomorrow morning.
One of the most frequently cited experts on tax law in Polish media – he writes for Rzeczpospolita, Dziennik Gazeta Prawna, and Parkiet not because it looks good on a résumé, but because certain things cannot be explained in a court filing and someone needs to say them out loud. Author of AI Decoding Satoshi Nakamoto: Artificial Intelligence on the Trail of Bitcoin’s Creator. Co-author of the award-winning book Bezpieczeństwo współczesnej firmy (Security of a Modern Company).
Kancelaria Skarbiec holds top positions in the tax law firm rankings of Dziennik Gazeta Prawna. Four-time winner of the European Medal, recipient of the title International Tax Planning Law Firm of the Year in Poland.
He specializes in tax disputes with fiscal authorities, international tax planning, crypto-asset regulation, and asset protection. Since 2006, he has led the WGI case – one of the longest-running criminal proceedings in the history of the Polish financial market – because there are things you do not leave half-done, even if they take two decades. He believes the law is too serious to be treated only seriously – and that the best legal advice is the kind that ensures the client never has to stand before a court.
