Exemption of dividends from withholding tax without the requirement of beneficial ownership status – significance of the Head of the National Tax Information Service’s ruling

The condition of beneficial ownership has remained one of the key issues in withholding tax for many years, particularly in the context of applying exemptions provided for in the CIT Act. The legislator explicitly made the exemption from withholding tax on royalties and interest conditional upon beneficial ownership. In practice, however, tax authorities tend to extend this requirement to dividend exemption as well, even though the CIT Act does not explicitly indicate beneficial ownership status as a prerequisite for applying this exemption. This tendency raises significant doubts and remains a subject of dispute between taxpayers and the tax authorities.

In a ruling dated 19 December 2025 (ref. 0111-KDIB2-1.4010.43.2022.8.BJ), the Director of the National Tax Information Service, following the binding judgments of the administrative courts, confirmed that the application of the withholding tax exemption on dividend payments under Article 22(4) of the CIT Act may not be made conditional upon the recipient having beneficial owner status.

Facts and arguments of the applicant

The case concerned a Polish company whose sole shareholder was a German company acting as a holding company within a capital group. This entity generated revenue from its shareholdings in subsidiaries in Poland and Germany. It was indicated as part of the facts of the case that the recipient of the dividends did not conduct any operating activities. 

The Polish company had doubts as to whether, when applying the dividend exemption, one of the elements requiring verification was the determination as to whether the German shareholder met the definition of the beneficial owner of the dividend. The taxpayer pointed out that the conditions for exemption were formulated in a closed manner in the CIT Act, and the legislator deliberately did not provide for the status of beneficial owner in this respect. In the company’s opinion, there are no grounds for considering that the dividend exemption should be applied in the same way as other categories of receivables subject to withholding tax.

Beneficial ownership status and dividend tax exemption: the opinion of the Director of the National Tax Information Service and decisions of the courts

In the individual ruling originally issued by the Director of the National Tax Information Service, the authority indicated that one of the conditions for applying the withholding tax exemption was that the dividend recipient had the status of its beneficial owner.

However, following a complaint by the applicant, this decision was overturned by the Voivodeship Administrative Court in Łódź in its judgment of October 4, 2022, ref. no. I SA/Łd 505/22. The court indicated that the authority cannot, through interpretation, supplement the list of conditions for exemption with conditions that the legislator did not explicitly formulate in the content of Article 22(4) of the CIT Act. This position was also upheld by the Supreme Administrative Court in its judgment of August 13, 2025, ref. no. II FSK 1510/22.

Following the final judgment of the Supreme Administrative Court, the Director of the National Tax Information Service, when re-examining the case, was obliged to consider the legal assessment expressed by the court and issue a ruling corresponding to this position.

What does the approach of the Director of the National Tax Information Service mean for entrepreneurs?

Although the content of the interpretation issued after the judgments is undoubtedly a success for the applicant, it should not be equated with the general practice of the tax authorities. The Director of the National Tax Information Service was bound by the court’s legal assessment in this particular case, which forced him to change his previous line of interpretation. In a broader context, this issue remains a subject of dispute. The case law of administrative courts, including the Supreme Administrative Court itself, is not entirely consistent in this regard – some judgments include positions deriving the requirement to examine the status of the beneficial owner of dividends from general principles of EU law or the abuse of rights clause.

Tax regulations for dividends paid abroad and how we can help you

The tax authorities continue to take the position that the recipient of a dividend must be its beneficial owner for the withholding tax exemption to apply, and that verification of this status is an essential element of the remitter’s due diligence.

This issue will therefore be shaped by subsequent rulings and interpretations.

In our opinion, the position presented by the tax authorities is inconsistent with the applicable provisions of EU Council Directive 2011/96/EU of November 30, 2011, and the CIT Act. The condition that the recipient of the payment must have the status of its beneficial owner is explicitly stated only in relation to interest and royalties. The absence of similar regulations in the case of dividend exemption clearly means that the legislator did not foresee such a requirement. 

If the legislator had intended to make the possibility of benefiting from withholding tax exemption on dividend payments conditional on the shareholder having beneficial owner status, it would undoubtedly have indicated this explicitly in the provisions. Any attempt to impose such a condition indirectly or by analogy is unjustified.

In this context, the judgment of the Supreme Administrative Court should be seen as a positive signal.

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