WHT BOX

Do you conduct transactions with foreign counterparties? Learn more about the withholding tax rules

Withholding tax

(WHT – Witholding Tax)

Withholding tax (WHT) is income tax which the tax remitter is required to collect because of revenue obtained by non-residents.

What payments are subject to WHT?

  • Interest.
  • Payments under copyrights and related rights, rights to inventive designs, trademarks or ornamental designs, including from the sale of those rights.
  • Compensation for disclosure of a secret of a recipe or production process, for use of or the right to use an industrial device, including means of transport, a commercial device or a scientific device.
  • Know-how.
  • Fees for certain services (consulting, accounting, market research, legal, advertising, management and control, data processing, employee search and recruitment), payments under guarantees and the like.

Do I need it?

Any enterprise that conducts transactions with foreign counterparties should be aware of the rules for collecting and paying withholding tax. The specificity of these settlements requires knowledge of the tax regulations as well as international tax treaties. The specificity of these settlements requires knowledge of the tax regulations as well as international tax treaties.

Note!
Starting from 2019, in verifying the conditions for applying WHT at other than the basic rate, exemption or refraining from collection of WHT, the remitter is required to apply due diligence. The nature and scale of the remitter’s operations are considered when assessing whether it has used due diligence. The revised definition of the beneficial owner of payments is also highly relevant in this respect.

The new mechanism for collection of withholding tax, known as pay and refund, will be particularly important for taxpayers. In practice it will mean that the taxpayer is required to collect WHT on amounts in excess of PLN 2 million at the basic WHT rate.

Katarzyna Adamowicz
Head of Tax
Katarzyna_Adamowicz_cytat

Our Offer

We offer support in preparing and applying the new procedure for WHT and the pay-and-refund mechanism.
  • WHT certification in the form of independent confirmation of compliance with due diligence, and verification of counterparties and transactions for the purpose of applying exemptions from WHT. Report confirming that the adopted rules and the documents in the client’s possession comply with the requirements of the Corporate Income Tax Act.
  • Preparation of a written procedure for maintaining due diligence, tailored to the specifics of the industry and the client’s additional requirements.
  • Preparing applications and verifying the completeness of documents (complete application for WHT refunds, application for opinion on the use of exemptions).
  • Support in analysing transactions for the existence of reporting obligations, submitting reports of tax schemes on behalf of the client, and ongoing support in oversight of Mandatory Disclosure Rules.

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Pursuant to the Personal Data Protection Act of 29 August 1997 (Journal of Laws Dz.U. 2016 item 922, as amended), I consent to receive commercial and marketing information from KR Group sp. z o.o. sp. k. with its registered office at ul. Skaryszewska 7, 03-802 Warsaw, and to introduction into the database and processing by KR Group sp. z o.o. sp. k. of my personal data provided in this form. I also acknowledge that my consent is voluntary and that I have the right to review, correct or remove my data.

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