Poland: Ministry of Finance responds to parliamentary question re. WHT

This is to draw your attention to the published response of the Minister of Finance, Funds and Regional Policy to parliamentary question no. 24182 regarding the withholding tax. The response is indicative of the direction of projected changes to WHT legislation.

The question was asked in the context of the imminent commencement date (1 July 2021) of WHT legislation which introduced the pay and refund mechanism (where tax must be withheld from payments exceeding PLN 2M during one tax year of the agent and then may be reclaimed by the taxpayer). This legislation is supposed to be deferred again, this time until 31 December 2021.

In answer to the question, an Undersecretary of State in the Ministry of Finance said that the deferred regulations introducing the pay and refund mechanism will undergo substantial changes.

The changes would include, without limitation:

• narrowing down the scope of application of the mechanism (but so far there is no official confirmation of how exactly it would be narrowed down), and
• extending the scope of the exemption opinion onto preferential treatments under double tax treaties, which will for all practical purposes means that it will be possible to apply for such an opinion also for payments for professional (so-called "intangible") services, such as consulting, legal or advertising services.

The changes will be part of the Polish Deal (Polski Ład) and the amending legislation should be published in draft within weeks. This is expected to be accompanied by publication of the official tax guidance regarding WHT in its final version.

WTS&SAJA is monitoring the WHT change dynamics and will keep you informed on the progress of the related legislation.

If this issue pertains to your business and you are interested in additional information please contact our tax experts at WTS&SAJA.