WHT

As usual, in December, entrepreneurs think about how much the changes in the regulations that will come into force from January of the new year will affect their tax settlement and operations. To make it easier for you to find yourself in the maze of regulations introduced by the new Polish Deal (and not only), we have prepared a quick summary. Here are the most important changes in the law that will affect doing business in Poland in 2023.

Recently, the tax offices have been more into withholding tax, which results in a growing number of inspections of how this tax is being settled. Even though new withholding tax regulations have been in force for nearly a year now, they seem to remain quite problematic both for remitters and taxpayers. What appears to be most difficult?

The last major amendment to withholding tax regulations was supposed to take effect on 1 January 2019. However, the Ministry of Finance has continued to push back the date of their final implementation by way of successive regulations. They have also announced that they are already working on some new amendments. Thus, Polish entrepreneurs and their foreign contractors still do not know for sure when the announced regulations will become effective nor what they will actually entail.

Sometimes leasing equipment and machines abroad is less expensive than in Poland. However, the leasing of such equipment entails additional obligations, which taxpayers are very often unaware of. Firstly, under tax law, when a Polish entrepreneur purchases equipment rental or leasing services from foreign entities, the regulations on WHT (withholding tax) collection apply.

It is not easy to clearly determine whether WHT shall apply to dark fiber lease or not, as it requires a detailed analysis of both a given ROU agreement concluded by the Polish entity and the provisions of a relevant DTT. This analysis proves difficult as there is no wide common practice of the Polish tax authorities in this respect, and the authorities have seemed to be overlooking the issue in question.