In 2022, new rules for the settlement of transactions with foreign contractors will be introduced. The withholding tax collection system will be limited to related parties only and obligations will be limited to passive payments.

Withholding Tax (WHT) is a levy collected by the payer (Polish entrepreneur) on remuneration paid abroad.

Agreements on the avoidance of double taxation (or EU directives) often allow for a lower rate or no tax at all. However, the 2018 act amendment, which is to finally apply in 2022, shows that if the payments to the contractor exceed PLN 2 million per year, the payer must deduct the excess tax. Only then can you apply to the tax office for the return of the levy.

The withholding tax collection procedure has been narrowed down to related parties only and new obligations have been limited to passive payments, i.e., dividends, interests and license fees. Remuneration for intangible services has been excluded from the catalog.

Polski Lad also extends the use of copies of residence certificates that give the right to tax exemption. It also assumes simplification and clarification of the concept of the real owner of the receivables.