Ruling description

The Supreme Administrative Court (NSA) confirmed in its judgment of May 27, 2014 handed down in case no. II FSK 1563/12 that payers may apply rates provided for in treaties on the avoidance of double taxation based on certificates of residence obtained in past years and their business partners’ representations that there were no changes to the data in these certificates.

A company requested a written interpretation of tax regulations, explaining that its business involves payments for economic copyrights and licenses to publish works in book form to natural persons and legal persons other than those having their registered offices or management boards in Poland. Being an income tax payer, the company withholds 20% of the amounts due to the copyright or license holders for remittance as lump-sum income tax to the relevant tax office.

If payment is to be made to a non-resident, the company may apply a reduced tax rate provided for in the relevant double taxation treaty (DTT) or withhold no tax at all if this is what the given treaty calls for, provided it documents the place of residence or address of the registered office of the given taxpayer with a certificate of residence provided by the taxpayer.

The company wanted to know if it can apply a lower tax rate provided for in a DTT based on a certificate of residence issued in past years and an e-mail from a business partner representing that the data in the certificate has not changed.

The company’s position was that certificates of residence remain valid until there is a change in the situation described in them and that taxpayers need to present new certificates only if they move their place of residence or registered office to a new address.

The Director of the Tax Chamber in Katowice disagreed, holding that taxpayers must obtain certificates of residence evidencing the tax residence of their business partners as at the date of payments being made to them. Also, the certificate of residence, being a document stating the address of an entity for tax purposes issued by the competent tax administration authority, cannot  be substituted with a written statement from a business partner.

The Company appealed this interpretation to the Provincial Administrative Court in Kraków which reverted it with its judgment of February 10, 2012 (case file no. I SA/Kr 1869/11). The Tax Chamber Director filed a last resort (cassation) appeal against this judgment and this was eventually dismissed by the Supreme Administrative Court (NSA). The NSA emphasized that the applicable tax laws lay down just the minimum requirements for certificates of residence, and say nothing about their terms of validity. These certificates evidence specific facts and remain valid for as long as these facts remain unchanged, viz. until the taxpayer moves to a new place of residence for tax purposes. The tax authority is therefore wrong in assuming that payers holding valid certificates of residence must request a new certificate of residence after each payment, documenting the payment beneficiary’s tax residency during the period covered by the payment. The relevant regulations require the address of the taxpayer’s registered office (place of residence) for tax purposes to be documented with a certificate of residence and not by multiple certificates.


The above ruling considerably reduces the additional burdens placed on the shoulders of payers and cuts the costs of obtaining tax refunds by withholding tax payers. This judgment is particularly important since the tax authorities often insist wrongly that payers holding current certificates of residence must seek new certificates confirming tax residency as at the date of payment every time they make a new payment. There are no legal grounds whatsoever for this requirement and it is enough for the payer to hold a residence certificate on the date of payment containing up-to-date information. Also, the accuracy of this certificate may be confirmed by the business partner in question with an e-mail stating that the facts set out in the certificate are as before.