Poland: Interest required to be paid on unduly withheld taxes (CJEU judgment)

Article 78(5)(1-2) of the Polish Tax Code is incompatible with EU law

Article 78(5)(1-2) of the Polish Tax Code is incompatible with EU law

The Court of Justice of the European Union (CJEU) on 8 June 2023 held (case file C-322/22) that Article 78(5)(1-2) of the Polish Tax Code, which provides that interest on overpaid tax is not due if the relevant refund claim is submitted more than 30 days after the alleged overpayment of tax, is incompatible with EU law.


The CJEU held on 10 April 2014 (case file C-190/12) that Polish rules imposing withholding tax on interest earned by third-country (i.e., non-EU/EEA) investors in Poland are incompatible with EU law.

Nonetheless, the Polish legislator has not amended those rules, and investors subject to withholding tax have been required to seek refunds of unduly withheld taxes pursuant to a process that is usually very lengthy and costly. In addition, investors generally have been denied interest on the unduly withheld taxes as a result of the 30-day refund claim deadline.

KPMG observation

Based on the CJEU judgment, foreign investors may seek refunds of interest on unduly withheld taxes for both future claims and closed refund claims (although the possibility to reopen closed cases are subject to relatively short statutory deadlines).

The CJEU judgment also may affect refund claim involving other types of entities as well as value added tax (VAT).

Read a June 2023 report prepared by the KPMG member firm in Poland



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