A decree published 31 December 2018 limits application of Article 26(2e) of Poland’s corporate income tax law and temporarily postpones or limits withholding tax rules, depending on the type of payment.
The decree refers to the withholding tax rules when a payment exceeds a threshold of PLN 2 million (approximately U.S. $530,000). The decree does not affect other withholding tax requirements that are effective 1 January 2019. Read TaxNewsFlash
Under the withholding tax regime, beginning 1 January 2019, Polish entities must exercise due diligence in verifying whether the conditions for applying a preferential tax rate are satisfied as well as the status of the recipient under the new definition of beneficial owner. If it is not possible to verify the status of the payment recipient, the tax liability may fall on the tax remitter. Also, taxpayers need to verify whether the agreements include “gross-up clauses.”
It is also important to identify starting dates for specific requirements for taxpayers and tax remitters having tax years that do not correspond to the calendar year (e.g. rules for calculating whether the PLN 2 million threshold has been exceeded, in the context of payments made before and after 1 January 2019).
Read a January 2019 report [PDF 467 KB] prepared by the KPMG member firm in Poland
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