Poland: Approval of new changes to tax regulations impacting WHT rules on various bonds
Clearstream Banking1 informs clients that its local depository has confirmed changes to Personal Income Tax (PIT) and Corporate Income Tax (CIT) regulations that are being approved by the Polish Parliament and the President of Poland.
Consequently, from
1 January 2024
withholding tax rules will be updated in relation to various bonds (that is, interest and capital gains on redemptions) as shown below. The new changes are intended to:
- override the changes approved by the Polish Parliament in June 2023 (as shown in Announcement A23063) for non-resident legal entities and individuals and for resident individuals; and
- confirm the implementation of the June 2023 changes in relation to all individuals.
Withholding tax regulations applicable to non-resident legal entities2 and individuals
Bonds | WHT |
Domestically issued T-bondsa | No WHT |
Domestically issued T-bills | WHT applied |
Domestically issued Bank Gospodarstwa Krajowego (BGK) bondsa | WHT appliedb |
Domestically issued Bankowy Fundusz Gwarancyjny (BFG) bondsa | WHT appliedb |
Corporate and Municipal Bondsa | WHT appliedb |
Domestically issued mortgage bonds | No WHT |
a. Refers to bonds with a minimum maturity of one year, traded on a regulated market or introduced to an ATS in a country which has a DTT signed with Poland, covering the taxation of interest, dividends and royalties.
b. In some cases, though, no WHT would apply depending on formal issuer activities with regard to informing related bondholders, the tax office and the tax remitter about the rules of interest taxation.
Withholding tax regulations applicable to resident individuals
WHT shall apply to interest and income on the price difference between redemption value and purchase value on all domestically issued bonds and T-bills (except mortgage bonds).
Withholding tax regulations applicable to all individuals
For the withholding tax regulations applicable to all individuals, the rules described in Announcement A23063 regarding the tax base calculation for bond redemptions are confirmed:
The local depository stated that currently local custodians are treating the payment of coupons and the redemption of bonds (nominal value payment to the investor) separately. However, from 2024 the tax base calculation will combine the last coupon payment and bonds redemption. The tax base for the withholding tax determination will be the result of the difference between (a) the amount obtained from the redemption of bonds together with the benefits (interest) obtained for the last period before the redemption and (b) the expenses incurred for the acquisition or purchase of the bonds.
Impact on clients
Clearstream Banking is currently assessing with the local depository as to how the updates will affect its operational processes and will advise its clients about the impact in due course.
Further information
For further information, clients may contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or their Relationship Officer.
We continue to monitor the Polish market and will provide further information as it becomes available.
---------------------------------------
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.
2. No WHT applies to income on price difference between the redemption value and the purchase value paid to residents.