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Polish Deal – changes to withholding tax (WHT)

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by Klaudia Bielecka

20 September 2021

 

The draft Polish Deal, which has been recently submitted to the lower chamber of Polish parliament (Sejm), modifies the withholding tax regulations. The changes include:

 

  • narrowing the application of the WHT refund procedure to passive income (e.g. royalties, interest or dividends) paid to associated enterprises;
  • allowing opinions to be issued not only on tax exemption under income tax acts but also on preferential rates (reduced tax rates) under tax treaties;
  • clarifying the principles of due care to be exercised when applying a reduced tax rate or exemption, in particular for payments made to associated enterprises;
  • allowing the withholding agent to sign the statement in accordance with the rules of its representation;
  • clarifying the definition of beneficial owner.


The new regulations are to apply from 1 January 2022. Withholding agents should already start preparing for the new regulations.


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