From January 1, 2019 the payer making the payment of receivables subject to withholding tax in excess of a total of PLN 2 million will have to meet additional formal conditions in order to apply a reduced tax rate or exemption under the treaty for avoidance of double taxation or international regulations.

If the amount of the payments exceeds the limit of 2 million, the new regulations allow not to collect the withholding tax or collect it at the rate specified in the double taxation treaty only if the payer submits a statement signed by all members of its management board regarding:

• possession of documents entitling not to collect a tax or to collect it at the rate resulting from the treaty for avoidance of double taxation and
• verifying with due diligence the conditions for exemption or non-collection of tax or the application of the rate specified in the treaty for avoidance of double taxation and the lack of knowledge resulting from this verification that there are circumstances preventing tax exemption, non-collection of the tax or the application of a reduced rate.

Such statement is effective until the end of the second month after the month in which it was made. If the payments are made after this deadline, a new statement must be made.

Non-collection of the withholding tax will also be possible if the payer has a chargeable opinion of the tax authority issued at the request of the taxpayer or of the payer concerning the application of the withholding tax exemption.

Exception

Based on the provisions of the Ordinance of the Minister of Finance, the application of the abovementioned rules shall be excluded for the third time for the period of 6 months (until June 30, 2020) on payments to taxpayers having their seat or management in the territory of a state that is a party to a double taxation treaty with Poland, which provides for the rules of taxation of dividend income, interest and royalties, if there is a legal basis for exchange of tax information with the country where these taxpayers have their seat or management.

Note

If the submitted statement is untruthful, an additional tax liability of 10% of the tax base of the given receivable will be established.