Double tax treaties are very important instruments used by the investors in their attempt to minimize the costs of running a business in other country from their own. So far, Poland has signed treaties of double taxation avoidance with several states such as: Albania, Algeria, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Egypt, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kygyzstan, Korea, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Philippines, Portugal, Qatar, Romania, Russia, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Syria, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uruguay, Uzbekistan, Vietnam, Zambia and Zimbabwe. Several other treaties are still pending to be approved.
OECD has delivered the model after which most of these treaties are elaborated so a global context is granted to it. The only changes that may appear are the ones regarding the tax rates, or the conditions to which has to be met in order to beneficiate from these provisions.
The profits may be exempt from paying the corporate tax of 23%
if the applicant can bring evidence that these profits are already charged in the country of origin. This is the so called exemption method. Other way to avoid the taxation is trough credit
, when the profits are charged by the investors is allowed to request for a refund.
The dividends paid to foreign companies
originated from signatory states are usually charged with a rate below the standard rate of 19% rate imposed for non-treaty countries
. The same situation applies for the royalties or the interests who can be subject to a smaller withholding tax or even exempt from paying these taxes
Beneficiating from these incentives can be tempting, so certain special measures are taken in order to avoid the tax frauds, for instance every treaty elaborated after the OECD model has a tax exchange resolution stated at the end of the treaty. There are also protocols signed on this matter between the countries which beneficiate from this program.