From July 1 2019, payments from Poland abroad that are
subject to a withholding tax (WHT) regime and exceeding PLN 2
million ($520,000) will be subject to a standard 19%/20% WHT
rate. If a payment qualifies for an exemption or a reduced WHT
treaty rate, a recipient (or in cases of gross up clause a WHT
remitter) can apply for a WHT refund. The threshold will apply
to one recipient per year.
There will be two methods to apply for a reduced WHT rate or
exemption at source. One of them will require submitting a very
special statement. Any incorrect information provided in the
aforementioned statement may result in a 10-30% additional WHT
fee, and potentially even personal penalties. The other is to
obtain an advance ruling on a WHT exemption issued by Polish
All new WHT procedures will be carried out in an electronic
procedure. A number of additional documents will be required,
including verification of foreign taxpayer's substance and
beneficial owner status (in case of a WHT exemption).
There is not much time until July 1, and neither remitters,
taxpayers, or even Polish tax authorities seem to be prepared
for the major change.
The PLN 2 million threshold is calculated inclusive of
payments (subject to WHT) starting from January 1 2019.
Payments made before July 1 2019 are still subject to an
earlier, simpler system of WHT relief, and is based mainly on a
certificate of residence of a recipient (taxpayer), as well as
due diligence of a paying entity.
Jacek Wojtach (firstname.lastname@example.org)