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June 30, 2021

Polish Ministry of Finance publishes decree deferring certain provisions of the new withholding tax reform to 31 December 2021

On 28 June 2021, Poland’s Ministry of Finance published a decree dated 25 June 2021, which defers the introduction of the withholding tax pay and refund system until the end of the current year, i.e., to 31 December 2021.

This is a further extension of the deadline for the introduction of a new withholding tax (WHT) collection mechanism. The introduction of this new mechanism was initially planned for 1 January 2019 and was subsequently rescheduled several times, with the previous effective date planned as of 30 June 2021.

For more information on the pay and refund system, see EY Global Tax Alert, Poland defers certain provisions of new withholding tax reform to 1 January 2021, dated 24 June 2020.

It is important to note that other stringent provisions of the reform were not subject to deferral and have been effective as of 1 January 2019. Accordingly, the Polish tax remitter is obliged to exercise due diligence to determine if the payment recipient is eligible to benefit from relief at source. The new, more rigid definition of the beneficial owner is also now in force.

The Ministry of Finance also announced that certain additional amendments to the pay and refund rules should be expected before the end of this year. Future Tax Alerts will cover developments in this and other areas.

The additional time resulting from the postponement of pay and refund regime should allow taxpayers and tax remitters to analyze the impact of the new WHT regime and to use the available means to secure their tax position in view of the new rules which require a proactive approach to benefit from relief at source, including the tax authorities’ WHT clearance opinion that is available in certain situations.


For additional information with respect to this Alert, please contact the following:

EY Doradztwo Podatkowe Krupa sp.k., Warsaw

EY Doradztwo Podatkowe Krupa sp.k., Wroclaw

Ernst & Young LLP (United States), Polish Tax Desk, New York


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