24 June 2020 saw publication (see Journal of Laws, item 1096) of the Finance Minister regulation of 19 June 2020 to amend the regulation excluding or restricting the application of Article 26(2e) of the Corporate Income Tax Act in order to again defer the effective date of the new withholding tax mechanism.
In the new withholding tax mechanism, if payments subject to withholding tax made by a withholding agent to a taxpayer exceeded PLN 2M during a tax year, the tax on any further such payment made to the taxpayer in excess of the threshold would have to be withheld using the standard statutory rates (20% for interest, royalties, intangible services, and 19% for dividends).
The regulation defers this new mechanism for payments above PLN 2M until 31 December 2020.
However, the new regulation does not affect the requirements which came into force on 1 January 2019, such as:
- due diligence verification if conditions for preferential treatment have been satisfied, and
- the beneficial owner test.
On that same date another regulation of the Finance Minister was published (see Journal of Laws, item 1095) to amend the regulation excluding or restricting the application of Article 41(12) of the Personal Income Tax Act. After this amendment, the new withholding rules applicable to personal income tax are disapplied until 31 December 2020 as well. However, in the case of personal income tax, the new mechanism concerns payments made between 1 July 2019 and 31 December 2019.
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