Investing in Poland from the level of the Netherlands or through a Dutch holding company is becoming more and more troublesome

Nov. 4, 2020 Poland

First of all, there are significant anti-abusive provisions upcoming in the local Polish and Dutch regulations as of 2021:

  • new business substance requirements for service companies in the Netherlands - minimum EUR 100k of annual wage expenses, office space for the period of 2 years;
  • introduction on WHT on interest and royalties paid from DutchCo to low tax jurisdictions;
  • implementation of obligatory WHT remittance in Poland (pay-and-refund regime); although the government announced that these regulations will be loosened, no draft aft was published yet.

And if it was not enough, on Friday both countries signed a protocol amending the Double Tax Treaty. The amendment includes:

  • real estate clause - right for Poland to tax income on the sale of shares in a Polish real estate company;
  • new permanent establishment definition;
  • new provisions on determining ultimate tax residency;
  • transparent entity clause;
  • general anti-abusive clause.

We will let you know once it is known when exactly new DTT regulations come into force.

Łukasz Bączyk
Head of Tax, Board Member