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Taxation of Dividends in Poland

Taxation of Dividends in Poland

Updated on Friday 11th September 2015

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Investors should know that certain exemptions apply for the taxation of dividends in Poland. There is also a reduced rate for the applicable withholding tax on dividends, according to specific conditions. Our lawyers in Poland can provide personalized accountancy services and consultancy if you want to know more about the existing corporate taxes and social charges.
 
According to the Polish tax system, resident and non-resident business entities operating in Poland are subject to a number of taxes. These taxes include the income tax (both for legal persons and natural persons), the value added tax (VAT), certain local taxes and charges (like the real estate tax) and/or customs duties.
 
Dividends in Poland
 
The Polish law also regulates the payment and taxation of dividends. Dividends paid by Polish companies are subject to a fixed rate of 19%. This rate applies to the gross dividend amount. Dividends received by Polish companies from another Polish company or a company operating in the EU/EAA area and/or Switzerland are exempt for taxation if they fulfil certain conditions.
 
According to the Polish participation exemption, Polish companies are exempt from the withholding tax on dividends if the receiver of the dividends resides in another EU country and pays the relevant taxes on its worldwide income. Also, the company receiving dividends must hold at least 10 percent of the shares of the dividend payer company for at least two years, uninterrupted. 
 
Other provisions for dividends taxation in Poland
 
Poland has signed double taxation treaties with more than 80 countries in order to guarantee that companies are protected from double taxation. These treaties also influence the taxation of dividends. One of the benefits included in double taxation treaties is a reduced withholding rate for dividends, interests, royalties and capital gains.
 
Poland also has a Parent-Subsidiary Directive for companies. According to the provisions of this directive, dividends paid between related EU companies are benefit from a participation exemption.
 
If you want to open a Polish company, our lawyers in Poland can help you throughout the entire incorporation procedure. Please contact our Polish law firm for further details about taxation in Poland.
 
 
 

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