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The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting [Convention], signed on 7th June 2017, will underpin changes in the application of a several double tax treaties [DTT] Poland is a party to. This does not mean, however, that the new solutions introduced by the Convention, will apply in each international or cross border event to the full extent.

Particular countries - the signatories of the Convention - defined, in relation to which of the DTT’s they would like the Convention to be applicable and to which they would like that the Convention does not apply; and have also provided for the provisions of the Convention which they do not want to apply in any case.

The most interesting decisions taken by Poland in the enforcement of the Convention:


1)    regulations on partnerships and other tax transparent entities (hybrid entities) will be applied to the full extent;

2)    the provisions on dual resident entities will be applied in full (these provisions already are within most DTT’s concluded by Poland);

3)    methods for elimination of double taxation - Poland has chosen the method of tax credit as the main method and progressive exemption to income exempt in the country of residence;

4)    limitation of benefits will be a minimal standard. Specification of the limitation will be included in a special change of a particular DTT;

5)    the reduced withholding tax rate or exemption applicable to dividends will depend on having a stake for an uninterrupted period of last 365 days;

6)    capital gains on alienation of “real estate entities” - the transfer of shares or interest in entities deriving 50% or more of their value from immovable property within last 365 days will be taxed at source;

7)    rules on artificial avoidance of PE status including so called Person Closely Related to an Enterprise will not be applied by Poland;

8)    corresponding adjustments rules – will not be applicable to DTTs already containing relevant provisions.


Convention will apply to particular DTT provided the Convention is signed and ratified by both contracting states and only within the scope, in which both countries agreed for the enforcement of the Convention. For instance, the reservation made by Poland not to apply rules applicable to artificial avoidance of PE status will make it impossible for any other country to apply these provisions in relation to Poland (Polish residents).




Should you be interested in obtaining further information, or would like to discuss the impact of the above changes on your operations please contact:

Monika Dziedzic ,
Bartosz Głowacki , tel. + 48 22 322 68 88
or your advisor at MDDP.

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