Beneficial owners recognised for tax purposes in Poland - Polish debt securities

Polish debt securities (except T-bonds and EUR-denominated mortgage bonds)

The following types of beneficial owner of Polish debt securities (except T-bonds and EUR-denominated mortgage bonds) are recognised for tax purposes in Poland:

• Foreign and domestic individuals;
• Domestic legal entities;
• Foreign central banks;
• Foreign insurance companies;
• Foreign governments, foreign administrative subdivisions and foreign local authorities;
• Foreign banks and investment firms (as defined in EU MiFID regulations);
• International and supranational organisations;
• Entities specifically mentioned in the DTT;
• EU investors with a substantial holding.

Foreign and domestic individuals

The relief at source is limited to the application of the default tax rate of 19% upon receipt of the beneficial owner’s disclosure.

A quick refund is not available to individuals.

A standard refund is available to non-resident individuals, if relief at source was not obtained but this is always reviewed on a case-by-case basis.

Domestic legal entities

Domestic legal entities are paid gross, and should settle withholding tax themselves.

Foreign central banks

A tax exemption at source or through quick or standard refund is available if granted by the DTT signed between Poland and the Central Bank’s country of residence.

Foreign insurance companies

A tax exemption at source or through quick or standard refund is available if granted by the DTT between Poland and the country of residence of the foreign insurance company.

Foreign governments, foreign administrative sub-divisions and foreign local authorities

A tax exemption at source or through quick or standard refund is available if granted by the DTT signed between Poland and the country of residence.

Foreign banks and investment firms (as defined in EU MiFID regulations)

A tax exemption at source or through quick or standard refund is available if granted by the DTT signed between Poland and the entity’s country of residence.

International and Supranational organisations

Beneficial owners that are supranational/international organisations may benefit from a tax exemption. There are no particular Polish regulations granting tax exemption for these entities. However, agencies like the UN, EBRD, and NATO where Poland is a member are exempt from taxation in Poland.

A tax exemption at source or through quick or standard refund is available to those entities.

Entities specifically mentioned in the DTT

Legal entities resident of a country having signed a DTT with Poland and whose name is specifically stated in the DTT. These are mainly Government entities or Central Banks. Example: DTT Singapore-Poland: the Monetary Authority of Singapore; the Government of Singapore Investment Corporation Pte Ltd.

A tax exemption at source or through quick or standard refund is available to those entities.

Investment funds and pension funds

Eligible investment funds and pension funds: A tax exemption at source or through quick or standard refund is available for eligible investment funds and pension funds. This is all funds (not only EU/EEA) domiciled in a jurisdiction whose legal framework allows Polish authorities to obtain information about accounts held by the fund through an automatic exchange mechanism, for example, Common Reporting Standard or FATCA.

DTT resident investment funds and pension funds: Investment funds and pension funds residents in a country which has signed a DTT with Poland may benefit from a reduced tax rate on interest payments. A quick refund and standard refund are available in case a relief at source was not obtained.

EU investors with substantial holding

EU investors holding, for 24 months continuously, at least in 10% of the share capital of a Polish Issuer (or no less than 25% of shares in the equity of the company being the payer of interest, as per 2003/49/WE), may benefit from tax exemption on the respective income. 

This exemption is granted by the Polish Act of Corporate Income Tax and is related to implementation into Polish law of EU directive 2003/123/EC.

Note: The 24 months required holding period can be met before the impacted income payment but also after it. If the investor received income gross but sells the security before the end of the mandatory holding period, he is under the obligation to pay the tax amount to the Polish Tax Authorities.  

For EU investors with a substantial holding, all requests will be assessed on a "case-by-case" basis. 

Beneficial owners recognised for tax purposes in Poland – Polish T-bonds 

The following types of beneficial owners of Polish T-bonds are recognised for tax purposes in Poland:
•    Foreign and domestic Individuals;
•    Domestic legal entities;
•    Foreign legal entities;
•    Investment and pension funds. 

Foreign and domestic individuals

Relief at source is limited to the application of the default tax rate of 19% upon receipt of the beneficial owner disclosure. 

Quick refund and standard refund are not available.

Domestic legal entities

Domestic legal entities are paid gross and are responsible for setting withholding tax themselves.

Foreign legal entities

Foreign legal entities may benefit from a tax exemption on interest from T-bonds which is available at source or through a quick or standard refund. 

Investment funds and pension funds

Foreign investment and pension funds may benefit from a tax exemption on interest from T-bonds, which is available at source or through a quick or standard refund. 

Beneficial owners recognised for tax purposes in Poland – EUR-denominated mortgage bonds

The following types of beneficial owners of Polish EUR-denominated mortgage bonds are recognised for tax purposes in Poland:

• Domestic individuals;
• Foreign individuals;
• Domestic and foreign legal entities;
• Investment and pension funds. 

Quick refund is not offered on income payments derived from EUR-denominated mortgage bonds.

Domestic individuals

Relief at source is limited to the application of the default tax rate of 19% upon receipt of the beneficial owner’s disclosure.

A standard refund is available if relief at source was not obtained. 

Foreign individuals 

Foreign individuals may benefit from a tax exemption on interest from EUR-denominated mortgage bonds.

A standard refund is available if relief at source was not obtained.

Domestic and foreign legal entities 

Domestic and foreign legal entities may benefit from a tax exemption on interest from EUR- denominated mortgage bonds. A standard refund is available.

Investment funds and pension funds

Foreign investment and pension funds may benefit from a tax exemption on interest from EUR-denominated mortgage bonds. A standard refund is available.