Withholding tax. Get ready and avoid losing where you don’t have to.

In 2019, withholding tax rules have changed. Taxpayers are facing another amendment in 2020. The anticipated changes will include:

  • Regulation of the the tax remitter’s special due diligence when applying wht exemptions or reduced wht rates.
  • Exclusion of wht exemptions and reduced wht rates on payments in excess of PLN 2,000,000 to a single contracting party.

Łukasz Dachowski

Attorney-at-law / Tax adviser LL.M.
Managing Partner

For who?

Our services are intended in particular for Polish entities with foreign capital (mainly German and Dutch), making payments to their contracting parties - affiliates as well as e.g. foreign banks.

 

We also provide our support to foreign entities which, on the basis of their contractual commitments, will become eligible to apply for a wht return in the respective proceedings before Polish tax authorities.

 

If you wish our support to feel adequately prepared for the planned changes in terms of the Polish withholding tax - we are here to help you.

What are your profits by working with us

Expert support with a pragmatic approach

Comprehensive legal and tax services

Services provided in English and German

Attention to quality at every stage of the process

Scope of our services

Certification process

Comprehensive assistance in the due diligence process
and drafting of the relevant written procedure.

Monitoring amounts paid

Assistance in implementing procedures for monitoring the amounts paid in excess of the PLN 2,000,000 threshold.

Opinion on the application of the wht exemption

Professional support in preparing the proceedings to obtain an “opinion on the application of the exemption”.

Security for management board members

Protecting management board members against liability for tax offences in a broad sense.

Audits and withholding tax refund proceedings

Auditing contracts concluded by our Clients and conducting proceedings for withholding tax refunds.

Compliance with the new rules is mandatory

Withholding tax is to be deducted by the tax remitter (the company making the payment) in connection with the payment of certain amounts due, such as e.g. dividends, interest, loyalties or remuneration for advisory services.

The current regulations in place provide for wht exemptions or reduced wht rates (e.g. 5 or 15%) in connection with payments made to contracting parties from abroad. There will be significant changes in this regard in 2020.

Find out what changes you must be ready for. The changes in store for 2020 include:

  • Regulation and emphasis on the issue of the tax remitter’s duty of due diligence when applying wht exemptions or reduced wht rates. The changes also provide for the duty to verify elements of the foreign contracting party’s situation.
  • Exclusion of wht exemptions and reduced wht rates on payments in excess of PLN 2,000,000 to a single contracting party. 3 new methods will be introduced for handling payments in excess of that amount:
    • payment of the wht and subsequent application by the tax remitter or the foreign contracting party for wht refund (formalised proceedings before Polish tax authorities);
    • application for an “opinion on the application of the wht exemption” by the tax remitter or by the foreign contracting party, with regard to payments of dividend or interest to an affiliate (formalised proceedings before Polish tax authorities);
    • regular statements by the tax remitter’s management board members regarding the fulfilment of statutory conditions, including elements of the foreign contracting party’s situation.

Failure to comply with the new rules may result in imposing an additional amount of tax penalty (10-30%) or personal liability for a tax offence on the part of the tax remitter’s management board members.

Our achievements

The outstanding quality of our legal services is confirmed by numerous awards in prestigious industry rankings. We are a reliable and highly professional partner you can trust.

Contact

We will be happy to answer your questions and clarify any doubts you may have with regard to the planned changes in withholding tax. Our specialists are looking forward to hearing from you - call us or write to us.