In the general interpretation no. SP4.8223.1.2020 of April 15, 2020, the Minister of Finance, referring to the judgments of the Supreme Administrative Court as well as to the contents of the OECD Model Convention, stated that a foreign plant has a specific functional separation from its Polish parent company. Moreover, it operates in another country and participates in economic life there. As a result, such an establishment should be subject to the tax jurisdiction of the State where it operates.
Therefore, where a permanent establishment carries out an economic activity and incurs from its assets an expense - which is a tax deductible expense for that establishment - in respect of the claims referred to in art. 21 § 1 of the CIT Act or Art. 29 § 1 of the PIT Act, in accordance with the provisions of such receivables should not be treated as income earned in Poland. Consequently, neither a Polish resident nor his or her foreign establishment is obliged to collect withholding tax if the establishment conducts business activity and, for the purposes of that activity, acquires a benefit, and the expense for the acquisition of that benefit is borne from the assets of the establishment and constitutes, in tax terms, a cost that should be attributed to that establishment.