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 tax authorities.
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.