Last reviewed: 26.02.2025
What is WHT opinion?
The opinion on the application of preferences (commonly referred to as the WHT opinion) confirms the eligibility to apply withholding tax (WHT) preferences under the Corporate Income Tax (CIT) Act and relevant tax treaty agreements. Incorrect withholding amounts can lead to either a tax bill or a tax refund, making it crucial to understand and adjust withholdings to avoid surprises during tax filing.
A foreign recipient of the payment or a Polish tax remitter (paying company) may submit the application, provided they include the required documentation, such as:
- A certificate of residence of the recipient,
- A statement confirming the beneficial owner status of the foreign recipient, and
- Any supporting documentation required under Polish tax law.
The WHT opinion applies only to such payments received from a single entity, regardless of whether the applicant is the foreign taxpayer or the Polish tax remitter. This restriction stems from the electronic form template used for submitting applications, though the legal provisions governing this aspect remain unclear.
How to Apply for a Withholding tax Opinion?
The opinion should be submitted in a file electronically corresponding to the logical structure available in the Public Information Bulletin on the website of the Ministry of Finance.
How long does the WHT application process take, and how much does it cost?
The issuance timeline for the Withholding tax opinion is generally 6 months; however, in practice, the process may extend to 9-12 months due to administrative procedures. The fee for obtaining the opinion is PLN 2,000.
Once issued, the WHT opinion remains valid for 36 months from the date of its issuance, provided that:
- The conditions for tax exemption continue to be met, and
- The Polish tax authorities are notified within 14 days of any factual changes that may affect the eligibility for the exemption.
Failure to report such changes within the required timeframe could impact the ability to apply withholding tax preferences.
What Information must be included in a WHT Opinion Application?
A WHT opinion application must include details on income tax, withholding tax, and tax withholding obligations. Applicants must provide identification data, the purpose of applying, and supporting documents like recent pay stubs, employment income records, and proof of capital gains or interest income.
The correct amount of tax withholding is determined using a tax withholding estimator. Compliance with withholding applies regulations ensures accurate tax payments, avoiding tax evasion or incorrect amounts withheld. Foreign persons and independent contractors may also need to submit documents proving their filing status, schedule payments, and eligibility for tax credits, standard deduction, or exemption tables.
Ensuring proper documentation while electronic filing helps avoid delays, penalties, or unexpected additional tax bills while maintaining compliance with tax law in a tax year.
When Can the financial institutions deny a WHT Opinion?
The Polish tax authorities may refuse to issue a WHT opinion in certain cases, particularly when there are reasonable doubts regarding the taxpayer’s eligibility for withholding tax (WHT) exemptions. A refusal may occur if:
- The taxpayer does not conduct genuine business activity, raising concerns about the legitimacy of the entity.
- The documentation attached to the application does not accurately reflect the actual financial state of the applicant.
- The foreign recipient’s statement regarding beneficial owner status is questionable or inconsistent with available information.
- The conditions for applying WHT exemptions are not met under the relevant tax treaty or income tax regulations.
- There are reasonable assumptions that the payment was structured to avoid tax, which could indicate potential tax evasion.
It is crucial to comply with wage withholding and withhold tax regulations to avoid denial of a WHT opinion. In such cases, the Polish tax authorities may conduct a detailed review of the taxpayer’s financial records, tax payments, and compliance with income tax withholding regulations before making a final decision.
For entrepreneurs who provide services or who do business in Poland, we have prepared a number of guides on international taxation and related laws. It is therefore worth checking out the latest guides:
- Corporate Income Tax (CIT)
- Guide to VAT
- Tax on civil law transactions (PCC)
- Permanent Establishment
- Dividend Tax
- Tax strategy
- MDR Regulation
- Capital gains tax
FAQ – WHT Opinion in Poland
Who can apply for a WHT opinion?
A foreign recipient of the payment or a Polish tax remitter (paying company) may apply. The application may include a certificate of residence, a beneficial owner statement, and documents required under tax law.
How long does it take to obtain a WHT opinion?
The standard issuance timeline is 6 months, but in practice, it may take 9-12 months due to administrative procedures.
How much does a WHT opinion cost?
The fee for obtaining a withholding tax opinion is PLN 2,000. The opinion remains valid for 36 months if the conditions for tax exemption are met.
What happens if factual changes affect the WHT opinion?
The Polish tax authorities must be informed within 14 days of any changes that may impact withholding tax eligibility. Failure to report may affect income tax withholding preferences.
Why can the Polish tax authorities refuse a WHT opinion?
A WHT opinion may be denied if:
- The taxpayer does not conduct genuine business activity.
- The documentation does not match the actual financial state.
- The beneficial owner statement is inconsistent.
- The payment is structured to avoid tax, indicating tax evasion.
What laws regulate WHT opinions in Poland?
The Corporate Income Tax (CIT) Act, tax agreements, and income tax withholding regulations govern withholding tax in Poland.
Does a WHT opinion affect income tax obligations?
A WHT opinion determines eligibility for withholding tax preferences, but it does not exempt the taxpayer from income tax, federal income tax, or other tax payments required under tax law.
How does a WHT opinion impact tax withholding and withholding allowances?
If granted, the WHT opinion allows for reduced tax withholding based on applicable withholding tax rates and withholding allowances. It is crucial to accurately report the tax withheld to benefit from the opinion. Without it, the federal withholding or withholding amount may be higher.
Can foreign persons or nonresident aliens apply for a WHT opinion?
Yes, foreign and nonresident aliens receiving employment income, dividend income, or other additional income in Poland may apply for a WHT opinion to determine how much tax should be generally withheld.
How can a WHT opinion impact federal tax withholding and estimated income taxes?
A WHT opinion can help determine the correct federal tax withholding for foreign recipients of income in Poland. It ensures that estimated income taxes are calculated accurately, preventing overpayment or underpayment. Individuals receiving regular pay or other income should perform a paycheck checkup to confirm that enough tax is withheld during each pay period. Compliance with withholding returns and tax return requirements is essential to avoid tax issues related to social security tax, Medicare taxes, and own taxes under the Social Security Act.
