Poland: Withholding tax collection mechanism delayed again, until 31 December 2021 (COVID-19)

Effective date of new withholding tax collection mechanism delayed again, until 31 December 2021

Effective date of new withholding tax collection mechanism delayed again

The Ministry of Finance on 28 June 2021 issued decrees concerning the corporate income tax law and individual (personal) income tax law, and further postponing the effective date of the new withholding tax collection mechanism to 31 December 2021 (initially scheduled for 1 January 2019).

The decrees—effective 30 June 2021—apply only to the collection of withholding tax. The regulations requiring those remitting withheld taxes: (1) to exercise due diligence when verifying the conditions of applying a withholding tax exemption or lower withholding tax rate; and (2) to qualify recipients as “beneficial owners” in line with a new broader definition of that term (including the obligation to verify whether they conduct actual business activity) are still applicable.

According to the explanatory notes to the decrees, the reason for another postponement is the prolonged state of the coronavirus (COVID-19) pandemic.

According to information from the Ministry of Finance, legislative work on draft amendments to the withholding tax measures is almost finished. The Ministry of Finance expects that comprehensive withholding tax amendments could be passed by the end of 2021. The details are yet not known.

Read a June 2021 report prepared by the KPMG member firm in Poland


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