On 28 June 2019, the Minister of Finance published a Regulation extending the suspension of applicability of Article 26 (2)(e) of the Polish CIT Act until 31 December 2019 (under the previous version of the Regulation, the applicability of this provision had been suspended until 30 June 2019).

The amended legislation, which came into force on 1 January 2019, introduced an obligation to meet additional conditions in order to be eligible for a tax exemption or a preferential tax rate for payments subject to withholding tax.

The extent of the additional obligations imposed upon the taxpayer depends on the amount of payment. For payments over PLN 2 million, taxpayers are, in principle, entitled to apply a tax exemption or a preferential tax rate provided they submit a declaration that:

  • they have documents enabling them to apply a tax exemption or a preferential tax rate, and
  • they have verified the payee and have no knowledge that would preclude the possibility of applying an exemption or a preferential rate.

Should it fail to meet these conditions, a taxpayer is required to withhold the tax at non-reduced rates.

According to the amended Regulation, this regime will only apply after 31 December 2019.