Poland: Application of the PLN 2 million threshold delayed until 31 December 2019

09.07.2019

Clearstream Banking's1  informs customers that the Polish Ministry of Finance has amended the Ordinance, extending the waiver for certain institutions from monitoring the PLN 2 million threshold from 30 June 2019 to 31 December 2019. This is further to our Announcement A19017.

Effective

28 June 2019

the amendment to the Ordinance delays the application of the PLN 2 million limit until 31 December 2019, and initially foreseen to apply from 1 July 2019 to 1 January 2020, for:

  • income paid to nonresidents from countries which have an exchange of tax information agreement with the Republic of Poland or where an applicable double taxation treaty covers the taxation of interest, dividends and licenses and;
  • dividends paid to Polish residents.

The above-mentioned regulations of the Ordinance can apply only on condition that the custodian is in in possession of the required customer documentation (for example, certificate of tax residence, statements, self-declarations or any other customer document, if applicable) justifying a tax exemption or tax relief and provided those exemptions/relief are allowed by the respective specific tax regulations or double taxation treaty.

Furthermore, all payments made under the exceptions require an enhanced due diligence procedure (as introduced on 1 January 2019) to determine the beneficial owner of the payments.

Impact on customers

The due diligence requirement still constitutes an obstacle to the relief at source offering for our local custodian.

For the time being, the waiver of the monitoring of the PLN 2 million threshold does not change the process currently in place and only a limited relief at source service can be offered as described in Announcements A19017 and A19083.

Our local custodian continues to monitor the situation with the different participants in the market. Customers will be informed as soon as further developments are published.

Further information

For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
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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.