Poland: Details of the 2023 bonds withholding tax regime - Update
Note: This announcement, originally published on 22 December 2022, has been further amended to clarify the conditions to obtain a tax exemption as recently informed by Clearstream Banking’s depository. Changes have been highlighted.
Based on the latest information received, and contrarily to what was initially announced by the depository, the bonds listed below will still be taxable for individual investors. The exemption for legal entities will apply based on a disclosure of the investor’s type.
Therefore, the default tax rate of 20% will continue to apply.
The applicable procedure to disclose the type of investor and obtain exemption and a potential relief at source for taxable entities will be communicated by the depository in January 2023.
Following Announcement A22145, Clearstream Banking1 informs customers that effective
1 January 2023
investors will benefit from an exemption from withholding tax on:
- Interest and redemption payments of all Polish domestic T-bonds (irrespective of their issuance date);
- And of any securities issued on or after 1 January 2019 which is either:
- A domestic Bank Gospodrastwa Krajowego (“BGK”) bond;
- A domestic Bankowy Fundusz Gwarancyjny (“BFG”) bond;
- Or a corporate bond.
Polish domestic T-bills, irrespective of their issuance date, will remain taxable on issue discount as bonds with maturity lower than one year are not eligible to this exemption.
Impact on customers
Investors shall no longer be taxed on interest and redemption payments relating to:
- any domestic T-bonds (irrespective of the date of issuance); and
- BGK bonds, BFG bonds and corporate bonds issued on or after 1 January 2019
and will therefore be paid on a gross basis for such payments as of 1 January 2023. Customers are not required to provide any certification to obtain the gross payment. Clearstream Banking’s local depository will by default, no longer apply withholding tax on such instruments.
For T-bills, Clearstream Banking’s local depository is still analysing the possibility to offer relief at source for certain entities in 2023.
Clearstream Banking will continue to monitor the Polish market and will provide further information as it becomes available.
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 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, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.