General information - types of securities, deadlines, other market specifics - Poland

Types of securities eligible in Clearstream

The eligible securities issued in Poland are as follows:

Debt securities:

• Treasury bills;
• Treasury bonds (T-bonds);
• Bank Gospodarstwa Krajowego (BGK) bonds;
• Bankow Fundusz Gwarancyjny (BFG) bonds;
• Corporate bonds;
• Municipal bonds;
• EUR and PLN denominated mortgage bonds.

Equities:

• Ordinary shares
• Exchange Traded Funds (ETFs)

Types of beneficial owner

The following types of beneficial owners are recognised for tax purposes in Poland:

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

• Foreign and domestic individuals;
• Domestic legal entities;
• Foreign central banks; 
• Foreign banks and investment firms (as defined in EU MiFID regulations);
• Supranational or international organisations;
• Foreign governments, foreign administrative sub-divisions and foreign local authorities;
• Entities specifically mentioned in the Double Taxation Treaty (DTT);
• Foreign insurance companies;
• EU investor with a substantial holding;
• Investment/pension funds.

For T-bonds

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

For EUR-denominated mortgage bonds

• Domestic individuals;
• Foreign individuals
• Domestic legal entities;
• Foreign legal entities;
• Investment/pension funds.

For equities

• Domestic legal entities;
• Foreign central banks;
• Foreign banks and investment firms (as defined in EU MiFID regulations);
• Supranational or international organisations;
• Foreign governments, foreign administrative sub-divisions and foreign local authorities;
• Entities specifically mentioned in the DTT;
• Foreign insurance companies;
• Investment/pension funds;
• EU investors with a substantial holding.

Statutory deadline for reclaiming withholding tax

The statutory deadline for reclaiming withholding tax is usually five years after the end of the calendar year in which the dividend payment is made, unless stated otherwise in the DTT signed between Poland and the country of residence of the BO. 

Such exceptions exist in the DTTs signed by Denmark, Germany and the Netherlands.

The deadline by which Clearstream must receive the documentation for an application is at the latest four months before the statutory deadline. 

All reclaim applications received after this deadline will be processed by Clearstream on a “best efforts” basis. However, in such cases, Clearstream will apply an extra charge and accepts no responsibility for forms that have not reached the Polish Tax Authorities by the date considered to be the statute of limitations deadline.

When are refunds received?

The estimated time for receiving a refund is on average from 6 to 12 months from the date on which the standard refund application was received by the Polish tax Authorities. This timeframe can vary depending on when the application was filed and the complexity of the information provided in the reclaim form.

Notes on tax reclaims

Clients warrant the completeness and accuracy of the information they supply to Clearstream.

It is the client's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due. Clearstream is under no obligation to carry out any investigation in respect of such information.

With respect to tax reclaims in general, clients are reminded that Clearstream accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country.

Market specifics

Due diligence

Following a tax reform applicable from 1 January 2019, interest payments and dividend payments on Polish securities are generally taxed at standard rates (20% and 19%). Tax relief at source is offered to select types of clients.

A bill dated 2022 requires a check to determine if the investor is a related entity to the issuer. To ensure the beneficial owner’s eligibility for relief at source, a due diligence process was introduced by Clearstream’s local depository. This is a mandatory step to obtain relief at source.

Calculation method for discount price and taxation

Redemptions on debt securities are taxed by default on the entire redemption amount. 

Clients can limit taxation to the discount price (the difference between the redemption price and the purchase price) by meeting the following conditions:

• Provide the purchase price: The original purchase price must be specified in each redemption instruction. If provided, the discount price is calculated as:
  Redemption Price - Purchase Price = Discount price
• In addition for EUR Mortgage Bonds, submit the "Power of Attorney from beneficial owner to Bank Handlowy for EUR Mortgage Bonds" (Tax forms to use – Annex D). For redemptions of EUR-denominated mortgage bonds, this form must also be submitted to ensure the tax base is limited to the issue discount.

In practice, the tax base (the last coupon) will be reduced by the difference between the nominal value of the bonds and the purchase price of these bonds (if it exceeds the nominal value).

For clients unable to provide the purchase price, it will be considered that the purchase price is equal to zero and, as a consequence, the entire redemption amount will be taxed.

Important: 

• Clients providing the purchase price without requesting a reduced tax rate do not need to provide an OTC.
• Beneficial owners that are eligible and apply for tax exemption do not have to provide the purchase price.