New WHT regime
Currently, payments for interest, royalties, dividends and certain services (e.g. advertising, management etc.) are subject in Poland to WHT exemptions or lower treaty-based rates.
Under the new measures, the basic rule assumes automatic collection of 19% or 20% on such payments by the Polish tax remitter for any excess above PLN 2 m (per recipient per year), transferred to the tax office, while foreign recipients of the payment will be allowed to request a WHT refund. The WHT collection will be automatic, and irrespective of the existence of a double tax treaty or EU Directives.
There are two possible ways for the Polish remitter to apply a WHT exemption or lower tax rate for such payments; however, these involve extensive documentation and require significant analysis before implementation.
Application of the new regime for payments exceeding PLN 2 m per year per recipient is currently suspended until 30 June 2019 (for certain specific payments suspension is indefinite). However new stricter criteria for determining the beneficial owner and tax remitter’s due diligence are applicable as of 1 January 2019.