Restrictions related to application of the WHT preferences
As of January 2022, Poland implemented new regulations concerning the withholding tax (WHT). The aim of the changes was to impose new restrictions for application of the WHT preferences.
In Poland the WHT applies to selected cross-border payments, including for example:
- some intangible services, e.g. advisory, management, data processing, control and services of a similar nature,
- royalties,
- dividends, and
- interest.
The WHT is collected and transferred to the Polish tax authority by the tax remitter, i.e. a Polish entity that is making such payments to the Polish non-residents.
There are two main WHT rates: 19% and 20%, and their application depends on the type of the payment: the 19% rate is usually applied to dividends, while the 20% rate is levied on interest, royalties and certain intangible services.
The WHT remitter may apply for WHT preferences (WHT exemption or a reduced WHT rate) on the basis of the EU Directives or the relevant Double Tax Treaty, only if certain conditions are met. In particular, the WHT remitter is obliged to verify with due diligence that conditions for application of the WHT preferences are fulfilled.
The new “pay and refund” mechanism applies in Poland as of January 1, 2022. By definition, it consists of the obligation to pay the WHT to the Polish tax authority and the possibility of receiving a refund of the WHT overpayment, once the Polish tax authority confirms that the conditions for application of the WHT preferences are met. The pay and refund mechanism is mandatory in case of the so called passive payments (including for example dividend, interest and royalties) made to related non-residents that exceed the threshold of PLN 2 million per annum (summed for a particular recipient). Such payments may still benefit from the WHT preferences, if:
- the management board of the Polish company submits a statement (WH-OSC form) to the tax authority, or
- the Polish tax authority issues an opinion on application of the WHT preferential treatment.
If a payment was subject to the pay and refund mechanism, it is possible to apply for a refund based on the special overpayment procedure. The application can be filed by the taxpayer (if he incurred the economic burden of WHT) or by the tax remitter (if the payment was subject to a gross-up mechanism and the WHT was covered by the tax remitter). The overpaid WHT should be refunded within 6 months provided that the applicant is eligible for the refund.
For more details please contact TIAS tax advisors: office@tias.pl
We are happy to inform, that this article was published by Antea Alliance of Independent Firms:
Click here
Zobacz również
.png)
Tax relief measures
Od 1 stycznia 2022 r. zarówno w podatku dochodowym od osób prawnych (CIT), jak i w podatku dochodowym od osób fizycznych (PIT) obowiązuje znacznie poszerzony katalog preferencji podatkowych. Obok już istniejących ulg pojawiło się wiele nowych. Dlatego też warto przeanalizować możliwość skorzystania z oszczędności podatkowych, jakie dają ulgi.
Introduction of the Global Minimum Tax in Poland (Pillar 2)
Starting January 1, 2025, regulations concerning the so-called global minimum tax (Pillar 2) are expected to come into effect in Poland.
Changes in the employment ofr Ukrainian citizens
From 1st of July 2024, changes related to the employment of citizens of Ukraine will be in force. They were introduced by the Act of 15 May 2024 amending the Act on Assistance to Citizens of Ukraine in Connection with the Armed Conflict on the Territory of Ukraine and certain other Acts (Dz. U. 2024 r. poz. 854).