Poland: Certification requirements for withholding tax exemption on mortgage bonds

Following our announcement A15188, dated 30 September 2015, and as of

1 January 2016

interest paid to non-resident individuals or legal entities for Polish mortgage bonds is exempt from withholding tax based on the procedures explained below.

Background

Foreign natural persons not having residence in Poland and foreign legal persons not having registered office or management in Poland are, since 1 January 2016, exempted from withholding tax when receiving income from interest or discount on mortgage bonds. Such an exemption includes mortgage bonds that are issued and settled in a foreign currency (for example, Euro denominated mortgage bonds).

The modalities to apply such tax exemption have been clarified by our local depository and are explained below.

Impact on customers

The following final beneficial owners are eligible for tax exemption at source, via the quick refund or standard refund procedures, after submission of the required tax certification by the prescribed deadlines:

• Legal entities not resident of Poland;
• Individuals not resident of Poland;
• Legal entities resident of Poland (such beneficial owners are under the obligation to declare their income and pay their tax directly to the Polish Tax Authorities).

Individuals resident of Poland may apply for obtaining the 19% tax rate.

The certification requirements are similar to the ones for the other categories of bonds and are described in our announcements A14177, dated 22 December 2014 and A12087, dated 27 November 2013. 

Deadlines for submission of tax documentation

Relief at source

• Original certificates: at the latest four business days before the respective interest payment date by 10:00 CET.
• List of beneficial owners: at the latest two business days before the respective interest payment date by 10:00 CET.

Quick refund

• Original certificates: at the latest four business days before the last business day of the month when the interest was paid by 10:00 CET.
• List of beneficial owners: at the latest one business day before the last business day of the month when the interest was paid by 10:00 CET.

Note: As the quick refund procedure is based on market practice, Clearstream Banking¹ will assist customers with quick refund applications but can only remit to customers' accounts the amounts as received.

Standard refund

The withholding tax reclaim must be filed with the Polish Tax Authorities no later than five years from the end of the calendar year in which the relevant withholding tax was paid. The deadline by which Clearstream Banking must receive the documentation for a standard refund application is at the latest two months before the statutory deadline.

Further information

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

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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and 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.