The Ministry of Finance announces changes regarding the reform of the withholding tax (WHT) regulations for 2021.

Key assumptions of the planned reform:

1. From the definition of the term “beneficial owner”, the words “legally or in fact” are deleted.
2. Passive payments exceeding the threshold of PLN 2 million per year per one taxpayer when made between related entities will be
covered by the withholding tax refund procedure, the so-called the “Pay and refund” mechanism.
3. Exclusion of dividends paid to Polish residents resulting from the withholding tax refund mechanism – the so-called the “Pay and refund” mechanism.
4. The due diligence condition will be refined by imposing higher standards of due diligence verification.
5. The opinion on the application of the withholding tax exemption for entities that have already received it from the tax authorities will be extended and valid for
a period of 36 months from 1st January 2021.
6. Change in the way of signing the declaration by the WHT payer – in accordance with the company’s representation rules.
7. Amendments to sanctions aimed at equalizing the principles of liability for concealing the truth or providing a false statement in a declaration under the Penal
Code with general principles contained in the Fiscal Penal Code.