Poland: Temporary suspension of withholding tax regulations – Update
Note: This announcement, originally published on 21 July 2022, has been further amended to clarify the conditions to obtain a tax relief throughout 2023 as recently informed by Clearstream Banking’s depository. Changes have been highlighted.
On 30 June 2022, the Ministry of Finance published two ordinances imposing temporary suspension of pay and refund regime for dividend and interest payment between related entities. This is further to Taxflash T22005.
On 30 December 2022, the Ministry of Finance further published two ordinances imposing temporary suspension of pay and refund regime for dividend and interest payments released during the 2023 calendar year. As a result, the monitoring of the PLN 2 mn annual limit for all dividend and interest payments and the obligation for local custodians to verify the relationship between issuers and investors before the income payment are suspended for the whole of the 2023 calendar year. In addition, the list of permanent exemptions from monitoring the PLN 2 mn annual limit has also been updated as detailed below.
With these suspensions, Clearstream Banking1 informs customers that effective
1 January 2023
local custodians are no longer obliged to monitor the PLN 2 mn annual limit for all dividend and interest payments or able to verify/document the relationship between the issuers and investors (whether institutional or individual) when performing the due diligence before the income payment. The suspension is only applicable during the 2023 calendar year.
In addition, the list of permanent exemptions from monitoring of the PLN 2 mn annual limit for certain dividend and interest payments was also published. It includes:
- Interest and discount when received by non-residents on bonds issued by State Treasury, Bank Gospodarstwa Kraowego S.A. and Bankowy Fundusz Gwarancijny;
- Interest, discount and dividends received by entities founded by state agencies of contracting countries unless the relevant contract states otherwise;
- Interest, discount and dividends received by supranational organisations, where the Republic of Poland is a member;
- Interest, discount and dividends received by entities who signed agreements of cooperation (with the Republic of Poland), if they are already exempted from income tax based on different regulations;
- Income paid to entities exempted from tax (on interest, discount or dividends), if the name of such entity is mentioned in the respective double taxation treaty signed by the Republic of Poland.
No changes apply to the due diligence requirements implemented in 2019.
Impact on customers
For the application of a relief at source as described in Announcement A22001, a statement signed by the investor confirming no relation to the issuer of the income (Statement D-No relation to issuer Declaration) is not required until 31 December 2023.
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 AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.