Poland

At a glance

Corporate Income Tax Rate 19%
Tax rate applied on capital gains 19%
Tax rate applied on branch profits 19%
   
Other taxes (e.g. local or state tax) no
   
Withholding taxes (standard rates) 20%
on dividends 19%      (1)
on branch profit remittance N.A.       (2)
on interest 20%      (3)
on royalties 20%
   
Loss carry back period 0 years
Loss carry forward period 5 years (4)

 

1)  Withholding taxes on branch profit remittance – there is no branch withholding tax on the transfer of profits from a branch to its head office (this is the way how we understand “the branch profit remittance”) due to the fact, that a branch is considered as part of the foreign company.

2)  Withholding taxes on dividends – in principle distribution of dividends are subject of 19% withholding tax applied on the gross amount, unless a DTT rules provide otherwise. Dividends paid by a Polish company to companies established in Poland or in other EU Member State may be exempt from withholding tax where the dividend recipient holds a minimum 10% share in the dividend payer’s share capital for at least two years. Also, dividends paid to a Swiss parent company may be exempt, thought the shareholding threshold in this case is 25%. The minimum holding period does not have to be fulfilled upfront on the payment date. If the mentioned period is not met after payment, the dividend recipient is obliged to pay the withholding tax with penalty interest. To apply such rules, the payer of the dividends must be provided with a certificate of tax residency of the dividend recipient.

3) Withholding taxes on interest and royalties - in principle interest and royalties are subject of 20% withholding tax applied on the gross amount, unless a DTT rules provide otherwise and a tax residence certificate is provided.  Also, in situations when the interest / royalties are paid by Polish company to companies with its seat in EU countries or Norway, Iceland, Liechtenstein and the following conditions are jointly fulfilled:

  • the Polish company directly holds at least 25% shares of the UE beneficiary, or
  • the EU beneficiary directly holds at least 25% shares of the Polish company, or
  • a third EU company directly holds at least 25% in the capital of both the Polish company and EU beneficiary.
  • above conditions have been maintained for an uninterrupted period of at least two years,
  • the Polish company possesses the tax residence certificate of the EU beneficiary

than withholding tax rate is 5%, regardless from the provisions of DTT.

4) Losses can be carried forward over the five following tax years up to the half the cumulated loss per year. 

Introduction

Poland (Polish: Polska), officially the Republic of Poland, is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north. The total area of Poland is 312,679 square kilometres, making it the 9th largest in Europe. Poland has a population of over 38 million people, which makes it the 34th most populous country in the world and the sixth most populous member of the European Union. Poland is a unitary state made up of sixteen voivodeships (Polish: Województwo). Poland is a member of the European Union, NATO, the United Nations, the World Trade Organization, and the Organisation for Economic Co-operation and Development (OECD). (Source: Wikipedia)

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CTA Members in Poland

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