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Poland: New withholding tax rules postponed again, now to 31 December 2020 (COVID-19)

Poland: New withholding tax rules postponed again

The Ministry of Finance released decrees (published 24 June 2020) that once again postpone the effective date of withholding tax rules for corporate income tax purposes. The new effective date is 31 December 2020.


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The withholding tax was originally scheduled to be effective 1 January 2019 but had been previously postponed (most recently to 30 June 2020).

The withholding tax collection mechanism for individual (personal) income tax purposes had already been effective for half a year, but the new decree suspends these rules from 1 January 2020 to 31 December 2020.


The decrees concern the requirement that Polish entities making payments of interest, dividends, or royalties or payments for certain intangible services to foreign taxpayers must collect withholding tax (at a standard rate of 20% or 19%) and then foreign taxpayers or the payers themselves (depending on who bears the economic burden of tax) may apply for a refund of the collected withholding tax (under the pay and refund mechanism).

KPMG observation

Tax professionals have noted that the postponement applies only to the mechanism of collection of the withholding tax. The regulations requiring remitters to exercise due diligence when verifying the conditions of applying a withholding tax exemption or lower rate of tax, and to qualify the recipients as their “beneficial owners” in line with a new broader definition of the term (including the obligation to verify whether they conduct actual business activity) also remain in force.

Possible developments with regard to new rules for collecting withholding tax

According to the explanatory notes to the decrees, the reason for postponing the new rules for collecting withholding tax is the prolonged state of the coronavirus (COVID-19) pandemic.

Previously, the Ministry of Finance announced that work is underway on amendments to the regulations regarding new rules for collecting withholding tax—rules that may exclude certain categories of payments from the new rules or change some procedural requirements, in order to ease tax remitters to apply exemptions. However, the details of these amendments are currently not known.

Read a June 2020 report [PDF 226 KB] prepared by the KPMG member firm in Poland

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