Relief at source - eligibility, documentation, deadlines - Polish debt securities

Who can obtain relief at source?

Tax relief at source depends on the type of Polish debt securities and is available through Clearstream for the following beneficial owners :

a. Domestic Bank Gospodrastwa Krajowego
b. Domestic Bankowy Fundusz Gwarancyjny
c. Domestic legal entities are paid gross, and they should settle withholding tax themselves
d. From 1 January 2026, a 0% applies to all funds (not only EU/EEA) domiciled in a jurisdiction whose legal framework allows Polish authorities to obtain information on accounts held by the fund though an automatic exchange mechanism

Due diligence (pre-approval)

Eligible beneficial owners who wish to apply for relief or exemption at source or through quick refund, must first be pre-approved by the depository.

The due diligence performed by the depository consists of verification of the certification provided (if correctly filled in, stamped, apostilled, etc.), specific researches on the correctness of the information provided and compliance checks on beneficial owners. For instance, if a beneficial owner declares itself to be an investment firm, the depository will verify this information with the available registrars.

It is however the entire responsibility of the final beneficial owner to:

• Monitor its tax status and applicable tax rate,
• Verify the applicable DTT,
• Monitor the changes of circumstances impacting its tax status (e.g. change of name, address, etc.).

The due diligence verification is a key element to apply relief at source or quick refund, and clients must be aware that providing the required documentation does not guarantee eligibility for the relief at source or quick refund.

The certification must be provided by the stated deadline to allow the depository to perform the due diligence and confirm the eligibility of the beneficial owner for relief at source or a quick refund.

Documentation requirements

To obtain relief at source on interest, a complete set of correctly completed documents must be provided by the required deadline.

Upon submission of the relevant documentation, the depository will perform a due-diligence analysis and confirm via email whether a reduced tax rate (or tax exemption) can be applied.

The documentation requirements are described below and the templates of the forms are available under Tax Forms to use - Poland section. 

1. Relief at source documentation for Polish debt securities (other than T-bonds and EUR-Mortgage bonds)

The documentation requirement depends on the type of entity as follows:

a) FOR ALL BENEFICIAL OWNERS

Per-payment instruction

Per-payment instruction for each tax rate provided via Swift (formatted MT565) or Xact Web Portal Message that includes:

• Client Account Number
• ISIN
• Corporate Action Reference ID
• Payment Date
• The total holding of securities
• Full name, fiscal address, and TIN number of the Beneficial Owner
• Country of Residence for Tax Purposes
• Tax rate to apply
• Holding for which the reduced/exempt tax rate applies
• Purchase price

The beneficial owner per-payment instruction must be provided before each interest payment.

Specificity for domestic legal entities

For domestic legal entities, only the instructions above containing shareholding information is required.

Specificity for EU investors with substantial holding

For EU investors with a substantial holding, all requests will be assessed on a case-by-case basis with current tax regulations and other requirements taken into account. There is no standard set of documentation.

b) IN ADDITION, FOR ALL BO (EXCEPT DOMESTIC LEGAL ENTITIES)

One-time certificate (OTC) for debt securities
The original One-time certificate is completed and duly signed by the client. It specifies among other things whether the client is the sole beneficial owner of all the debt securities held in the account. It must be provided once before the first income payment.
It remains valid for 5 years. Any changes to any details must be communicated in a new OTC.

Power of Attorney - Omnibus account
A Power of Attorney should be provided if a third party is completing the Declaration of Beneficial Ownership. The document must be provided once before the first applicable income payment and remains valid until revoked.

Specificity for individuals (both foreign and domestic)

Interest payments paid to individuals will be taxed at 19% upon submission of the relevant OTC and per payment instruction.

c) IN ADDITION, DEPENDING ON THE TYPE OF BO

Important Note: Investors who obtained a ruling from the Polish Tax Authorities on the applicability of the DTT rates must provide a copy of such ruling together with their certification for review and evaluation. Then an original or notarised copy of such ruling will be required.

2. Relief at source documentation for Polish T-bonds

FOR ALL T-BONDS BENEFICIAL OWNERS

Per-payment instruction per each tax rate provided via Swift (formatted MT565) or Xact Web Portal Message that includes:

• Client Account Number
• ISIN
• Corporate Action Reference ID
• Payment Date
• The total holding of securities
• Full name, Fiscal address, and TIN number of the Beneficial Owner
• Country of Residence for Tax Purposes
• Tax rate to apply
• Holding for which the reduced/exempt tax rate applies
• Purchase price

The beneficial owner’s per-payment instruction must be provided before each interest payment.

• One-time certificate (OTC) for Treasury bonds
  The original One-time certificate is completed and duly signed by the client. It specifies among other things whether the client is the sole beneficial owner of all treasury bonds held in the account. It must be provided once before the first income payment.
  It remains valid for 5 years. Any changes to any details must be communicated in a new OTC.

3. Relief at source documentation for Polish EUR-denominated Mortgage bonds

a) FOR ALL EUR-DENOMINATED MORTGAGE BONDS BENEFICIAL OWNERS

Per-payment instruction per each tax rate provided via Swift (formatted MT565) or Xact Web Portal Message that includes:

• Client Account Number
• ISIN
• Corporate Action Reference ID
• Payment Date
• The total holding of securities
• Full name, Fiscal address, and TIN number of the Beneficial Owner
• Country of Residence for Tax Purposes
• Tax rate to apply
• Holding for which the reduced/exempt tax rate applies
• Purchase price

The beneficial owner’s per-payment instruction must be provided before each interest payment.

• One-time certificate (OTC) for EUR-Mortgage bonds
  The original One-time certificate is completed and duly signed by the client. It specifies among other things whether the client is the sole beneficial owner of all EUR mortgage bonds held in the account. It must be provided once before the first income payment. It remains valid for 5 years. Any changes to any details must be communicated in a new OTC.

b)    IN ADDITION, FOR FOREIGN BENEFICIAL OWNERS

• An original certificate of tax residence
  An original certificate of tax residence issued by the beneficial owner’s local authority in the relevant year. It must include the beneficial owner’s own full name and address and remain valid until the end of the respective calendar year.

Deadlines for receipt of documents¹

Clients applying for relief at source must be pre-approved through the due diligence process.

In order to benefit from relief at source, eligible beneficial owners should provide the required documentation within the below prescribed deadlines. If any instruction, tax certification or amendment is received after these deadlines, the client's entire application for relief at source will be rejected. It may then be possible to process the application via the quick refund.

Clients will be informed no later than one business day before the payment date in the event of non-approval of a beneficial owner by our depository.

Special rules - Taxation of redemption

Taxation of redemption

Redemption payments are taxed similarly to interest payments. The eligible beneficial owners are the same.

If the purchase price is disclosed, the tax base for redemption is the result of the difference between:

1. The amount obtained from the redemption of bonds together with the benefits (interest) obtained for the last period before the redemption (i.e. the nominal/ redemption value); and
2. The expenses incurred for the acquisition or purchase of the bonds (i.e., the purchase price).

For obtaining the withholding tax on the discount price in the event of redemption on EUR MORTGAGE BONDS, client must:

1. Communicate the purchase price via per-payment instruction (via Swift formatted MT565) or Xact Web Portal Message that includes:
    

   Client Account Number
   ISIN
   Corporate Action Reference ID
   Payment Date
   The total holding of securities
   Full name, Fiscal address, and TIN number of the Beneficial Owner
   Country of Residence for Tax Purposes
   Tax rate to apply
   Holding for which the reduced/exempt tax rate applies
   Purchase price

2. Submit the "Power of Attorney from beneficial owner to Bank Handlowy for EUR Mortgage Bonds" (Tax forms to use – Annex D)

If the purchase price disclosed is higher than the nominal/redemption value, no tax is applied to this discount (which is then a negative figure); however, this does not reduce the value of the interest paid, which is subject to withholding tax, is also not reduced.

Consequence of an undelivered purchase price

If the purchase price is not delivered, then the entire redemption amount will be taxed (unless the beneficial owner is disclosed and eligible for a full exemption). 

Specificity for undisclosed beneficial owners

Clients providing the purchase price without requesting a reduced withholding tax rate do not need to provide an OTC

Specificity for certified beneficial owners eligible for a full exemption

There is no need/requirement to provide a purchase price for beneficial owners who both qualify for and request a full tax exemption.

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1. Clients are strongly recommended to verify the deadlines of each event in our tax notifications, as those may be subject to changes upon the request of the issuer.