In 2019, a mechanism for withholding tax (WHT) payments for transactions exceeding PLN 2,000,000 per counterparty was added to the income tax laws. In such a case, these regulations require the collection of WHT without the possibility to apply the exemptions/reduced tax rates provided for in double taxation treaties (UPO) and regulations that implement EU Directives. Later, after fulfilling formal requirements, the taxpayer may claim a tax refund in connection with the application of reduced rates resulting from UPO agreements or EU Directives.
From the very beginning it was known that the regulations will cause big problems for Polish WHT payers. Therefore, the Minister of Finance, by way of regulations and amendments to these regulations in 2019, has in practice postponed the application of these regulations twice, and on December 30, 2019 for the third time postponed the application of the new regulations for the majority of cases to June 30, 2020. At the same time announcing a change in tax laws in this area. Thus, Polish WHT payers are uncertain as to when and under what conditions the provisions on WHT collection for transactions above PLN 2,000,000 will apply and will apply.