The Supreme Administrative Court (NSA), in its judgment of 6 July 2021, II FSK 101/21, recognized the applicability of tax preferences contained in the double taxation avoidance agreement between Poland and Germany (DTAA) to limited partnerships.
Category: Withholding tax
From 2022, payers of withholding tax (WHT) are subject to the pay and refund mechanism. An amendment introduced in the Corporate Income Tax Act (CIT Act) allows a taxpayer or payer to request an opinion on the application of WHT preference in order to omit the application of the aforementioned mechanism. Such a request should be made to the competent head of the tax office, and the fee for its issuance is PLN 2,000. The opinion must be issued no later than within six months of the application being received by the office.
As part of the opinion on the application of WHT preferences, the office may confirm the possibility of applying an exemption from the collection of this tax on the basis of specific provisions or even not collecting the tax or collecting it at a lower rate on the basis of a relevant double taxation avoidance agreement. The opinion issued is valid for 36 months from the date of issue.
On 23 April 2020, on the pages of the Government Legislation Centre a draft regulation of the Minister of Finance amending the regulation on the exclusion or limitation of the application of Article 26, paragraph 2e of the Corporate Income Tax Act was published. The draft provides for another, already fourth postponement of the entry into force of the new withholding tax collection mechanism, this time to 31 December 2020.
Withholding tax is a tax that is generally paid by Polish companies (tax payers) in connection with the certain payments to foreign companies, including the payment of dividends (19%), interest (loan or credit) or remuneration for consultancy services (20%). Previous regulations allowed for the exemption of such payments from withholding tax in Poland or were subject to a reduced rate of withholding tax (e.g. 5% or 15%), provided certain legal requirements were met. From 01/07/2020 similar rules will apply, but with other important changes.
Procedure for WHT return in Poland – does it really have to be so difficult and complicated? Not necessarily. We explain this issue in our next infographic. We hope that it will be helpful for you. If you have any doubts, please contact us. We will be happy to answer your questions.
The procedure for obtaining an opinion on the WHT tax exemption in Poland is a very important and complicated issue. We explain this problem briefly in our next infographic . If you have more specific questions, don’t hesitate to contact us.
What is worth remembering about due diligence in the context of withholding tax in Poland? We have prepared another infographic infographic erstellt, in which we explain this complicated problem. If you have any questions, remember that you can contact us anytime.
WHT in Poland – how general rules from 01/07/2020 will look like? We explain this important issue in our infographic from the WHT series. We will be happy to answer your questions.