Withholding tax (WHT) – a tax on foreign contractors.
In the context of cooperation between Polish companies and foreign entities, the issue of withholding tax (WHT) arises. This tax may be applied in connection with the purchase of services from foreign entities, transactions involving intangible rights, particularly licenses or know-how, as well as payments of interest and broadly defined dividends.
Withholding tax is a highly complex issue, as it combines local Polish tax regulations, bilateral international agreements, and multilateral conventions (e.g., the MLI Convention).
Currently, Polish regulations have introduced a number of stringent obligations related to withholding tax.
In particular, taxpayers are required to exercise due diligence regarding the status of the foreign entity and continuously monitor the amount of payments being made.
If statutory thresholds are exceeded, there may be an obligation for mandatory tax collection, followed by lengthy proceedings aimed at recovering the overpaid withholding tax.
Our support for clients in the area of withholding tax includes, in particular: