MDDP’s Real Estate Practice with Justyna Bauta-Szostak, Piotr Paśko, Sebastian Serowik and Justyna Adamska handled the proceedings for a Client completed with a positive decision stating an overpayment in withholding tax of several dozen million PLN.
The decision was obtained on behalf of a foreign company from one of the leading groups in the commercial real estate business operating in Central, Eastern and Southern Europe.
The overpayment arose as a result of the disbursement of a dividend by a Polish company to its foreign shareholder.
In the course of the proceedings, the tax authority examined the foreign company’s compliance with numerous requirements related to the increasingly restrictive withholding tax provisions as stipulated in the Polish CIT Act.
Following the complicated 11-month-long proceedings, we managed to get a positive decision issued by the head of the tax office and have the overpaid tax refunded to our Client.
Given the new regulations, and the ambiguity thereof, no official explanations by the tax authorities and no tax rulings and court judgments that would include a detailed analysis of the requirements for exemption from withholding tax (tax authorities refuse to issue tax rulings on this specific issue), withholding tax remitters more and more frequently opt to withhold WHT instead of applying participation exemption. This is particularly visible on the regulated market, where the role of WHT remitters is carried out, among others, by brokerage houses.