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Recent changes to the WHT regulations resulted in a disturbance of a well-established market practice (switch from a relief at source to a pay & refund mechanism). Consequently, more and more foreign taxpayers suffer increased WHT costs on Polish investments.

This leaflet provides you with information about:

  • Impact of recent changes to the withholding tax (WHT) regulations in Poland on debt and equity investments
  • Possible exemptions from WHT and double taxation reliefs
  • Services KPMG Poland provides in the area of WHT such as: WHT overpayment claims, verification of entitlement to tax exemption and WHT reduced rates, tax binding rulings and preparing supporting documentation 
  • Our experience 
  • Contact details to KPMG Poland’s experts 

Why does it matter?

New, “revolutionary” WHT rules, have significantly changed the existing market practice. In light of additional requirements, such as the “due care” standard and the associated increased liability exposure, tax agents are currently much more reluctant to apply any WHT exemptions / reductions at source. Even though the entry into force of certain key elements of the new mechanism remains postponed, ambiguity of other rules which are already fully applicable (e.g. beneficial ownership clause) leads to considerable uncertainty among Polish taxpayers.

Foreign investors (both EU and non-EU) may be entitled to withholding tax (WHT) exemption in Poland (e.g. pension funds, investment funds).

Recent changes to the WHT regulations resulted in a disturbance of a well-established market practice (switch from a relief at source to a pay & refund mechanism).

Consequently, more and more foreign taxpayers suffer increased WHT costs on Polish investments.

Our response to your needs

when the tax has already been paid

  • Feasibility check [whether an entity is entitled to apply a reduced WHT rate or tax exemption based on (i) EU law / CJEU rulings (i.e. Aberdeen and Santander decisions); (ii) double tax treaties; and (iii) domestic law]
  • Cost-benefit analysis based on materiality thresholds
  • Comprehensive support during the WHT reclaim and refund procedure
    • One claim may cover 5 years backwards and WHT paid on various types of investments
  • Interest on overpayments may apply

when the tax hasn’t been withheld yet

  • Case-by-case analysis of taxpayers’ eligibility for reduced WHT rates / WHT exemptions under both domestic and EU law, including comparability analysis and beneficial owner status
  • Advice on WHT strategy
  • Preparation of respective documentation / statements required to apply for tax benefits at source
  • Comfort letters – certificates of independent tax advisors or attorneys-at-law backing the applicability of particular tax benefits with respect to foreign taxpayers (in support of the due care requirement vested in tax agents)
  • Preparation of binding ruling applications and representation of taxpayers before tax authorities / courts throughout the entire process

Why KPMG Poland?

Dedicated and experienced team of attorneys-at-law and licensed tax advisors

Ongoing monitoring of constantly changing Polish tax law environment / direct involvement in the legislative process within working groups

Ca. PLN 0.5 billion of WHT recovered for our clients to date

Flexible remuneration models (subject to individual arrangement)

Over 10 years of experience in WHT reclaim proceedings including representation of the Client in the landmark CJEU Emerging Markets Series case (C-190/12)

Contact

Katarzyna Trzópek

Manager, Tax

+48 (22) 528 15 78

ktrzopek@kpmg.pl

Joanna Sadkiewicz

Manager, Tax

+48 (22) 528 17 20

jsadkiewicz@kpmg.pl

Mariusz Kułagowski

Manager, Tax

+48 (22) 528 20 52

mkulagowski@kpmg.pl

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