Poland: Approval of changes to withholding tax regulations
Clearstream Banking1 informs clients that the Polish Parliament has approved amendments to the Polish Personal Income Tax (PIT) as well as the Polish Corporate Income Tax (CIT) regulations. This impacts the existing withholding tax process on redemption of bonds for individual investors and interest payment on certain bonds for institutional investors from
1 January 2024
A new way to calculate the tax base in relation to bond redemptions will be implemented. Under the new rules, the tax base will be the result of the difference between the amount obtained from the redemption of bonds together with the benefits (interest) obtained for the last period before such redemption and the expenses incurred for the acquisition or purchase of such bonds.
Local custodians will be bound to perform due diligence processes, as tax remitters on certain types of bonds (domestically issued T-bonds, corporate and municipal bonds issued after 31 December 2018) as well as mortgage bonds. The local custodians will be relieved from their obligation of tax withholding for these categories of bonds only if an exemption is available as a result of the due diligence process.
Impact on clients
As reported by Clearstream Banking’s local depository, the above changes may result in changing the relief at source process with respect to bonds. However, the actual impact of the above changes will be assessed on the basis of further clarifications.
We continue to monitor the Polish market for new developments and will provide more information as it becomes available.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG clients using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.