Poland: Publication of draft amendments to the current withholding tax regime - Update

16.11.2021

Note: This TaxFlash originally published on 7 October 2021, has been updated to provide customers with further information on the draft bill. Changes have been highlighted. 

The Polish parliament approved the bill submitted by the Government. It is now awaiting the approval of the President.

The Polish government submitted its draft bill to Parliament amending the current withholding tax rules. If approved, the new tax regulation will come into force on 1 January 2022. This is following our Taxflash T21011 of 27 May 2021.

This draft bill includes the following main changes, among others:

  • The removal of the obligation for local custodians to apply withholding tax on interest or redemption for treasury bonds. In that respect, the intentions of the Government and the consequences of such change are still expected to the clarified;
  • The restriction of the PLN 2 million limit to interest and dividends paid to related entities, that is to beneficial owners that are affiliated to the issuer;
  • The possibility for local custodians to accept copies of Certificates of Tax Residency under certain conditions;
  • The withdrawal of undisclosed payments on omnibus accounts from/to the PLN 2 million limit;
  • Technical changes in the beneficial ownership definition that will lead to changes in beneficial owner statements when applying for tax relief or the tax reclaim;
  •  The possibility for the beneficial owners to confirm the applicability of the Double Tax Treaties (DTT) rates with tax authorities before taxable payments are made. The procedure may be complex but the confirmation will be binding for local custodians.

Concerning the due diligence requirements implemented in 2019, it will be extended after 31 December 2021 for beneficial owners affiliated to issuers but it is still unclear if for other investors or other types of income it will also be extended.

We continue to monitor the Polish market for new developments and will provide more information as it becomes available.

This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A. its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions