New Polish Deal Obligations to Come Into Force

From 1 January 2022, a new Polish deal will change the rules of collecting withholding tax (WHT). Some changes particularly affect the rules of collecting WHT in case the payments of proceeds are made through entities that maintain securities accounts.

New rules enforce a pay-and-refund instrument for passive income (interest, dividends) earned by related parties that exceed PLN 2m in a tax year.

The Importance of the New Polish Deal:

According to the CIT Act, the entity that holds the securities’ account is responsible for identification if such a relationship exists and the limit is exceeded.

The payer of the proceeds from securities through an entity that maintains the securities’ account or through an omnibus account is bound to inform that entity about any relationship between the issuer and the taxpayer (the recipient) out the PLN 2m limit being exceeded not later than 7 before or to the payment. The information of the new Polish deal must be up before or on the payment if the circumstances change.

These rules set an additional duty on issuers of securities, to inform the withholding tax agent about any relationship with the beneficiaries of proceeds from the securities, i.e. bondholders or shareholders.

Article 30.5b of the Tax Ordinance Act, issuers of securities may be exposed to the risk of liability for the tax not collected by a third party (the tax agent) if the new disclosure obligations are not fulfilled.

It’s worth noting that the negligence to fulfill the new obligation may constitute a fiscal criminal offense which may be fined by up to 720 daily rates.

The new obligation may raise questions for the:
Situations in which the obligation to disclose arises,
The scope and the content of the disclosure,
The communication between the issuer and the tax agent,
The way of management of the tax risk stems from the new Polish deal.

Since the rules were introduced on 1 January 2022, new obligations may already occur.

What This Means for Businesses in Poland

Tax policy changes in Poland have direct implications for both domestic and foreign-owned businesses. Companies operating in Poland must stay informed about regulatory developments to optimize their tax position and maintain compliance. The Polish tax system includes CIT (19% standard, 9% for small taxpayers), VAT (23% standard rate with reduced rates of 8% and 5%), and various sector-specific levies.

For international entrepreneurs and investors, understanding the Polish tax landscape is essential for business planning. Poland offers several attractive incentives including the Polish Investment Zone (up to 15 years of CIT exemption), R&D tax relief (up to 200% deduction), and the IP Box regime (5% effective CIT rate on qualified intellectual property income). Professional tax advisory can help identify the most beneficial structure for your specific situation.

The interplay between Polish domestic tax law and international tax treaties is particularly important for foreign-owned entities. Transfer pricing regulations, withholding tax provisions, and anti-avoidance rules (GAAR) require careful navigation to ensure both compliance and optimization.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our tax advisory services in Poland, or contact us for a free consultation.