When a company is tax resident in one Member State and is operating in another Member State, the allocation of the taxing rights is usually dealt with in a bilateral double tax convention between the two Member States. These conventions usually follow the OECD model tax convention. The model convention allows the country where the company operates to tax the company if the company carries on business through a permanent establishment in that country, in which case the country may tax the profits attributable to the permanent establishment.

The convention between the United Kingdom and Poland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains leads to the same result on this point as the model convention. Poland may therefore tax companies resident in the United Kingdom if the company carries on business through a permanent establishment in Poland, in which case Poland may tax the profits attributable to the permanent establishment.