Poland: Dividends paid to foreign related entity subject to withholding tax (court decision)
The Provincial Administrative Court in Lublin has issued similar decisions.
The Provincial Administrative Court in Lublin has issued similar decisions.
The Provincial Administrative Court in Lublin dismissed a taxpayer’s complaint with respect to the tax authority’s failure to issue an opinion that dividends paid to a Dutch company were exempt from withholding tax.
The case file is: I SA/Lu 100/23 (5 April 2023).
As of 1 January 2022, payments of interest, royalties, and dividends exceeding PLN 2 million in a given year made to foreign related entities are covered by the pay&refund mechanism, under which payers must withhold a 19% tax on dividends or 20% tax on interest and royalties. Withholding of the tax may be avoided if the tax authority issues an exemption opinion. However, the tax authority refused to issue an exemption opinion with respect to dividends paid by the taxpayer to a related Dutch company because the dividends were tax-exempt in the Netherlands.
The Provincial Administrative Court in Lublin issued similar decisions in judgments dated 28 September 2022 (case file I SA/Lu 279/22), 21 September 2022 (I SA/Lu 316/22), and 5 April 2023 (I SA/Lu 136/23).
Read an April 2023 report prepared by the KPMG member firm in Poland
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.