Poland: Changes to Corporate Income Tax regulations: Taxation rules on interest payments to European Union/European Economic Area parent companies

11.10.2016

Effective

1 January 2017

changes to the Corporate Income Tax (CIT) introducing a “beneficial owner clause” to the exemption from tax on interest and royalties distributed to European Union/European Economic Area (EU/EEA) parent companies have been approved by the President of Poland and published in the official gazette on 27 September 2016.

Impact on customers

As of 1 January 2017, based on Article 21 par.3 of the Act on Corporate Income Tax (Journal of Laws 2014.851, as amended), EU/EEA companies holding uninterruptedly for 24 months at least 25% of the bond paid by the Polish associated company may obtain tax exemption on interest distributed as long as they confirm that they are the beneficial owner of the interest payment.

The exemption can be granted through relief at source, quick refund or standard refund procedure.

Documentation requirements

The following documentation, which is available from our Tax Forms to use - Poland page, has to be provided to Clearstream Banking1, in original, by the prescribed deadline at the following address:

Clearstream Operations Prague s.r.o.
Attn: PTR - Tax Services
Futurama Business Park Building B
Sokolovska 662/136b
CZ-18600 Prague 8
Czech Republic

For the benefit of relief at source

  • One-Time Certificate for Polish Securities
    The original, completed and duly signed by the customer and specifying, among other things, whether or not the customer is the sole beneficial owner of all the Polish securities held in the account, must be provided once before the first income/redemption payment; it remains valid until revoked. Any changes to any details must be communicated in a new One-Time Certificate.
  • The List of Beneficial Owners (LBO) 
    The LBO indicates complete data of each beneficial owner, the applicable withholding tax rate, the common code or ISIN, the nominal amount or number of securities and the tax rate to be applied and can be loaded from our website; it must be provided before each interest payment.
  • Certificate of Residence (COR)
    An original Certificate of Residence must be issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and it remains valid until the end of the respective calendar year.
  • Statement of Beneficial Ownership - bonds
    The original, completed and duly signed by the beneficial owner and specifying, among other things, that it holds at least 25% of the share capital distributed by a Polish Issuer. The statement must be provided per payment, duly notarised and apostilled in the beneficial owner’s country of residence.

For the benefit of the quick refund

The documentation is the same as for relief at source.

For the benefit of standard refund

  • Certificate of Residence
    An original Certificate of Residence must be issued by the beneficial owner’s local tax authorities including the beneficial owner’s full name and address. The Certificate of Residence must cover the relevant payment date.
  • Statement of Beneficial Ownership - bonds
    The original, completed and duly signed by the beneficial owner and specifying, among other things, that it holds at least 25% of the share capital distributed by a Polish Issuer. The statement must be provided per reclaim application, duly notarised and apostilled in the beneficial owner’s country of residence.
  • Declaration of not being engaged in a commercial activity in Poland
    The Declaration of not being engaged in a commercial activity in Poland must be provided, duly notarised and apostilled in the beneficial owner’s country of residence. It must be submitted once and remains valid for the one or more years that are completed in the form.
  • Power of Attorney from beneficial owner to Bank Handlowy w Warszawie SA
    A Power of Attorney, completed and signed by the final beneficial owner and duly notarised and apostilled in the beneficial owner’s country of residence must be provided in order to authorise Clearstream Banking's depository to reclaim withholding tax on customer's behalf. It must be submitted once and remains valid until revoked.
  • Full chain of Credit Advices
    The credit advices identify income payment details including the security type, gross amount of payment, date of payment and amount of tax withheld. It is required from each intermediary financial institution between the beneficial owner and Clearstream Banking. For example, if the beneficial holder is the customer’s client, the Credit Advice from the customer to the beneficial owner must be provided along with the Credit Advice received by us. The Credit Advice must reconcile with the information in the Letter of Request for Reclaim.
  • Letter of Request for Reclaim
    The Letter of Request to Clearstream Banking for Reclaim of Polish Withholding Tax authorises Clearstream to process the reclaim with the Polish Tax Authorities on the customer’s behalf. It must be provided to us, completed and duly signed by the customer, for each reclaim application.

Deadlines

Relief at source

  • Original certificates: at the latest four business days before the respective interest payment date by 10:00 CET.
  • List of beneficial owners: at the latest two business days before the respective interest payment date by 10:00 CET.

Quick refund

  • Original certificates: at the latest four business days before the last business day of the month when the interest was paid by 10:00 CET.
  • List of beneficial owners: at the latest one business day before the last business day of the month when the interest was paid by 10:00 CET.

Standard refund

The withholding tax reclaim must be filed with the Polish Tax Authorities no later than five years from the end of the calendar year in which the relevant withholding tax was paid. The deadline by which Clearstream Banking must receive the documentation for a standard refund application is at the latest two months before the statutory deadline.

Further information

For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
---------------------------------------
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking Frankfurt (CBF) customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.