The application of new withholding tax (WHT) rules was divided into 2 steps, but the date of the second step has been again postponed.
From 1st January 2019 regulations regarding due diligence and the amended definition of a beneficial owner of payments, important to apply reduced WHT rate, exemption or not to withhold WHT, are in force.
From 1st January 2021, in a case of all payments subject to WHT, made to a particular supplier, which exceed PLN 2 million (approx. EUR 0.5 million) annually, remitters will be obliged as a rule to withhold WHT in a standard rate. A taxpayer (or a remitter, if economically incurred the WHT burden) may apply for a WHT refund. Alternatively, a remitter will be allowed to apply reduced WHT rate, exemption or not to withhold WHT, on additional condition of submitting a very special statement or if a ruling on WHT exemption was issued by Polish tax authorities.
The above mentioned deadlines will be binding irrespective of a tax year of a remitter or a taxpayer.
CIT rules regarding payments exceeding PLN 2 million annually were to come into force originally on 1st January 2019, but were postponed 3 times (first to 1st July 2019, then to 1st January 2020 and then to 1st July 2020). Current postponement is therefore 4th in a row.
It should be mentioned that coming into force of analogical personal income tax (PIT) rules has been postponed simultaneously with CIT rules, with exception of 1st July 2019 – 31st December 2019 period, in which rules regarding payments exceeding PLN 2 million annually were binding only for PIT taxpayers.
We remind that WHT duties regarding payments exceeding PLN 2 million annually will not be binding at all with respect to some listed kinds of payments, e.g. to international organizations, for the use of transport vehicles, industrial or commercial device, on condition that there is a double tax treaty in force between Poland and supplier’s state of residency, which contains both an information exchange clause and rules for taxation of dividends/interest/royalties.
If you are interested in obtaining further information, or would like to discuss the impact of
the above on your business activity please contact:
Monika Marta Dziedzic Monika.Dziedzic@mddp.pl tel. + 48 22 322 68 88
or your MDDP adviser.