Adam Radomski
Business Development Executive
Withholding Tax (WHT) is an income tax that a payer is obliged to collect on income earned by non-residents in Poland. KR Group, as a tax and accounting group, provides tax advisory services and support in the preparation and implementation of the withholding tax settlement procedure, including the application of the pay and refund mechanism. Learn about the settlement rules, requirements and typical transactions covered by this tax.
Withholding Tax – to whom?
Withholding Tax is a key tax obligation for companies that carry out transactions with foreign entities. Every company that makes payments to foreign counterparties or non-residents should take into account the obligation to collect and remit withholding tax (WHT). KR Group experts offer support in preparing and applying the new WHT settlement procedure and the pay and refund.
Withholding Tax at KR Group
Withholding Tax (WHT) is one of the most complex areas of tax settlements, requiring knowledge of domestic tax regulations, double taxation treaties and the current positions of tax authorities.
The obligation to correctly determine the tax base, apply the correct tax rate and timely remit amounts due to the tax office rests with the payer, which entails significant financial risk and criminal fiscal liability.
Withholding Tax – KR Group offer
- Transaction analysis – identification of the arising obligation to pay withholding tax (WHT).
- Preparation of WHT verification in the form of independent confirmation of due diligence, counterparty and transaction verification for the purpose of applying an exemption from withholding tax collection.
- Preparation of a report confirming the compliance of the adopted principles and held documents with the requirements of the CIT Act.
- Drawing up a written due diligence procedure tailored to the specifics of the industry and additional requirements.
- Preparation of applications and verification of the completeness of documents (complete application for a refund of withheld tax, application for an opinion on the application of an exemption).
- Support in the analysis of transactions in terms of the existence of reporting obligations, as well as reporting a tax scheme on behalf of the client and ongoing supervisory support regarding MDR.
- Representation before tax authorities and administrative courts.
FAQ
What is withholding tax (WHT)?
Withholding Tax is a form of taxation in which the obligation to collect and remit the tax to the tax office rests with the payer making the payment. The tax is collected at the time of payment, most commonly in cross-border transactions such as the payment of dividends, interest, royalties or fees for intangible services.
Which payments are subject to WHT?
Withholding tax applies to payments made by Polish entities to foreign counterparties who do not hold the status of Polish tax resident. Payments subject to WHT include:
- interest;
- copyrights or related rights, rights to inventive designs, trademarks and ornamental designs, including also from the sale of such rights;
- payments for disclosing the secret of a formula or production process, for the use of or the right to use industrial equipment, including means of transport, commercial or scientific equipment;
- know-how;
- services in the field of advisory, accounting, market research, legal, advertising, management and control, data processing, employee recruitment and personnel acquisition, guarantees and sureties, and services of a similar nature.
Why entrust WHT support to KR Group?
Professional support in the area of Withholding Tax for companies with international transactions makes it possible to minimise tax risk, ensure full tax compliance and protect the company against potential sanctions. This support is particularly important for finance and accounting departments, as well as for management boards and chief financial officers making strategic business decisions in the context of cross-border settlements.
Who bears responsibility for withholding tax?
Companies making payments of interest, dividends, royalties, know-how fees or fees for intangible services should remember that the payer bears full responsibility for correctly determining the tax base, applying the correct tax rate and timely remitting WHT to the tax office.
What are the benefits of Withholding Tax (WHT) support?
Professional withholding tax (WHT) support brings a range of benefits. An analysis of the company from this perspective may enable an exemption from withholding tax, the application of a preferential or reduced tax rate, and in the case of overpayment, the possibility of applying for a refund of the overpaid tax. Cooperation with KR Group allows tax risk to be minimised, ensures compliance of cross-border settlements and protects the company against financial sanctions and criminal fiscal liability.
What is the Withholding Tax (WHT) rate?
Withholding Tax (WHT) in Poland is standardly 19% and applies to payments to non-resident entities, such as interest, dividends or royalties. In certain cases it is possible to apply a preferential rate or WHT exemption.
