DEFERRAL OF THE EFFECTIVE DATE OF NEW WITHHOLDING TAX REGULATIONS

This is to let you know that on 31 December 2018, the Minister of Finance’s Regulation dated 31 December 2018 on exclusion or restriction of application of Article 26(2e) of the Corporate Income Tax Act (the Regulation) was announced in the Journal of Laws. The Regulation is aimed to defer the effective date of the new withholding tax regulations as mentioned in our earlier newsletters.

The published text of the Regulation is aimed to exclude the application of the new withholding tax mechanism for the tax on the excess of more than PLN 2M:

  • Indefinitely for payments:

1. in respect of interest or discount on bonds issued by:

a) the State Treasury and offered on foreign markets,

b) Bank Gospodarstwa Krajowego and offered on foreign markets, intended to fund statutory activities of Bank Gospodarstwa Krajowego, concerning support to the economic policy of the Council of Ministers, implementation of governmental social and business programmes, local self-government and regional development programmes,

– obtained by taxpayers subject to limited tax liability in Poland;

2. to central banks that are not established in or managed from Poland, obtained in respect of interest or discount on bonds issued by the State Treasury on the Polish market and acquired starting from 7 November 2015;

3. to business units established by the state administration authority and other countries under an agreement or contract unless these agreements or contracts provide otherwise;

4. to international organisations of which Poland is a member;

5. to entities with which Poland signed co-operation agreements if they were exempted from corporate income tax on these payments;

6. to entities exempted from corporate income tax if their names are given in the DTT to which Poland is a party;

7. to taxpayers established in or managed from a country with which Poland has a DTT that addresses the taxation of dividends, interest and royalties and with which Poland is legally permitted to exchange tax information, if these payments represent:

a) royalties for an industrial device including a vehicle or a commercial or scientific device,

b) fees for transportation of cargo or passengers out of Polish ports by foreign commercial sea carriers, except for transit cargo/passengers,

c) earnings of foreign air carriers in the territory of Poland, except for earnings from scheduled ticketed passenger flights.

  • Until 30 June 2019 with respect to any other payments than those listed in 7. above, if Poland is legally permitted to exchange tax information with the taxpayer's country of residence.
  • Until 30 June 2019 with respect to dividends and other corporate profit distributions to Polish tax residents.

If these issues pertain to your business and you are interested in our assistance, please contact your WTS&SAJA consultant or our office.

Doradztwo Podatkowe WTS&SAJA Sp. z o.o.

Bałtyk Building, 13th floor

ul. Roosevelta 22

60-829 Poznań

tel. (+48) 61 643 45 50

Warsaw Office

Central Tower, 22nd floor

Al. Jerozolimskie 81

02-001 Warszawa

This Newsletter is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.

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