POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
or exemptions on payments to a single entity of up to PLN2 million per annum. Under the withholding tax pay-and-refund mecha - nism, if the total amount of “passive” payments (ie, dividends, interest and royalties) to a single taxpayer that is a related party exceeds PLN2 million in the rel - evant tax year, the tax remitters will be obliged to col - lect withholding tax on said payments on the day they are made, at the standard Polish rates (ie, 19% in the case of dividends and 20% in the case of interest and royalties) on the surplus over PLN2 million, without the possibility of waiving collection of the tax under the relevant double tax treaty and without taking into account the exemptions or reduced rates as deter - mined under special provisions or double tax treaties. In such a case, the taxpayer or the tax remitter (if it paid the withholding tax from its own funds and bore the economic burden of the withholding tax) may claim a withholding tax refund. However, a tax remit - ter may apply reduced withholding tax rates or with - holding tax exemptions if: • the tax remitter provides the tax authority with a written statement confirming (under threat of tax criminal liability for breach) that all the requirements for a lower rate or an exemption have been fulfilled; or • a tax remitter or a withholding tax payer receives an opinion on the applicability of the withholding tax exemption from the tax authority, valid for three years. Significant fines apply if, in the absence of an exemp - tion, a tax remitter does not collect the statutory with - holding tax. Value Added Tax In principle, anyone whose total sales of goods and/or services (with some sector exceptions) in the previous year exceeded PLN240,000 must register as a VAT payer (such threshold shall be reduced pro rata if the activity was conducted only for part of the previous year). The basic VAT rate is 23% (reduced rates of 8%, 5% or 0% may apply to some goods and services).
VAT rules are fairly strict and under some circumstanc - es provide for the joint and several liability of members of the supply chain for its payment. Under certain cir - cumstances, additional penalty rates of 15%, 20%, 30% or 100% may apply. An electronic accounting ledger detailing all VAT-able transactions must be sub - mitted to the tax authorities on a monthly basis, or quarterly in some cases (VAT return). The split payment mechanism applies to some B2B transactions, whereby the payment that corresponds to the VAT amount of the invoice is paid into a special bank account of the supplier – the VAT subaccount. This mechanism is compulsory in the case of pay - ments for certain goods and services. The reverse charge in VAT for the supplies of certain energy products came into force on 1 April 2023 and will remain in force until 31 December 2026. From 1 April 2026, entrepreneurs are required to use a National e-Invoice System (minor exceptions apply). Other Taxes Other taxes may apply from time to time, depending on the type of business, such as property tax, excise duty, tax on civil law activities, tax on means of trans - port or tonnage tax. 5.3 Available Tax Credits/Incentives Subject to the restrictions and limitations resulting from EU state aid laws, some tax incentives (such as income and property tax reliefs) may be available to investors that obtain a permit to invest in so-called Special Economic Zones. Some tax relief may also be available for the purposes of restructuring. 5.4 Tax Consolidation A tax group that enables a participating company to be treated as a single CIT payer (and to consolidate the profits and losses of the group members) is avail - able to Polish companies that meet the following cri - teria:
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