The refund of dividend taxes is essential for international investors seeking to recover withholding applied in other countries. This process helps to avoid double taxation and to improve tax efficiency. Recently, Poland issued a key resolution that impacts tax exemptions on dividends paid by Polish companies.
The Polish Ministry of Finance has published the general ruling number DD9.8202.1.2024, dated November 15, 2024 and published on November 20, 2024. This ruling clarifies the requirements to qualify for exemption from withholding tax on dividends, as established in Article 22 (4) of the Corporate Income Tax Act (CIT). In particular, it is specified that the recipient of dividends should not benefit from a tax exemption on their entire income in an EU (or EEA) State. According to this new interpretation, the recipient must be subject to the taxation of their worldwide income in Poland or in any other EU or EEA country as a tax resident of those countries.
This criterion is met even in situations where the recipient of dividends in an EU or EEA State is exempt from taxes on those dividends under the provisions implementing the Parent-Subsidiary Directive (PSD). However, the ruling states that, even if dividends are not taxed in an EU or EEA country due to complex corporate structures or individual circumstances of the recipient (such as the use of tax losses or income derived exclusively from dividends), the recipient may not be considered as a beneficiary of the exemption on their income in the EU or EEA.
How Dividend Refund can help you in this new context
This type of resolution underlines the importance of having experts in the recovery of dividend taxes to ensure the correct application of international regulations and maximize tax efficiency. At Dividend Refund, we specialize in recovering withheld taxes in more than 15 countries, including Poland.
At Dividend Refund, we prioritize optimizing our clients' time and resources, providing them with a transparent and secure experience. Our team of experts closely monitors regulatory changes in major markets to ensure excellent service.
More clarity, more savings
Although this general ruling does not constitute a formal source of law, it does provide protective guidance for taxpayers and withholding agents who request an individual resolution regarding their tax situation. At Dividend Refund, we ensure that these guidelines are applied strategically to maximize your tax savings.
For more information on how this change may impact your dividend recovery in Poland or other countries, do not hesitate to contact us.
Source: Dividend Refund
