30 December 2020 saw publication (see Journal of Laws of 2020, items 2416 and 2421) of the regulations of the Minister for Finance, Funds and Regional Policy of 28 December 2020, which are introduced to again defer the effective date of the new withholding tax mechanism for both income taxes.
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 tax could only be recovered on application which, however, must prove that the requirements for use of the exemption or treaty rate have been complied with.
The new regulations exclude the application of this mechanism over the next six months (until 30 June 2021), which in fact amounts to the fifth deferral in a row.
If these issues pertain to your business and you are interested in our assistance, please contact your WTS&SAJA consultant.
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