Insurance services ultimately not subject to withholding tax

Since 2018 tax authorities claimed that insurance services in Poland are subject to withholding tax at the rate of 20% as services similar in nature to guarantees.

This claim was repeatedly contested by tax courts which reversed the rulings the tax authorities issued with such an approach.

Finally, towards the end of 2023, Director of National Revenue Information issued a number of private tax rulings (e.g. rulings dated 17 November 2023 ref. 0111-KDIB1-2.4010.473.2023.2.END, dated 23 November 2023 ref. 0114-KDIP2-1.4010.526.2023.2.MW, and dated 30 November 2023 ref. 0111-KDIB2-1.4010.494.2023.1.MM) where he abandoned the controversial position and agreed with the applicants. And the applicants’ position was that insurance services purchased from non-residents are not among services subject to WHT so that no tax should be withheld from payments for such services that are made to foreign residents.

The argument was that there are essential differences between both types of services (guarantees vs. insurance) as they are intended for different commercial purposes and as such should not be conflated with each other.

The new rulings are precedential, potentially signalling a change in tax authorities’ WHT treatment of insurance services.

If this issue pertains to your business and you are interested in our assistance, please contact us.

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