Payees liable for tax out of their own pockets

The draft ministerial clarifications and the interpretation by the head of the National Treasury Chamber alike confirm the unease already expressed by experts – establishing the actual beneficiary of interest will be very difficult, if not outright impossible, for companies. And a taxpayer who does not dispose of such knowledge is not entitled to apply the reduced tax rate provided for in a double tax treaty and must collect tax at source at either 19 or 20% (…) The requirement of establishing the actual beneficiary applies as of 1 January 2019; in this particular respect, actual application has not been suspended until 31 December 2019 as with the other new rules concerning tax at source (…)

Already, problems have appeared 

The basic difficulty lies in the fact that a Polish taxpayer has no possibility of investigating whether his foreign business partner actually pursues business operations in his home jurisdiction; all he can do is check whether the business partner appears in the relevant foreign register, explains Dr Janusz Fiszer, partner in GESSEL.

Full text is available (in Polish) in Dziennik Gazeta Prawna (8.07.2019). If you are interested in an English-language version contact us: kontakt@gessel.pl