WHT — withholding tax and traps for foreign suppliers

What this is about

When a Polish company pays a foreign entity for:

dividends (on PL shares),
interest (on loans and bonds),
royalties (software, know-how, copyright),
intangible services (consulting, advertising, research, management, guarantees),
leasing or equipment rental fees,

— it must withhold WHT (withholding tax) and remit it to the Polish tax office.

Standard rate: 20% or 19%, depending on the payment type.

When the rate can be reduced

Two reduction tools:

Double tax treaties — typically 5–15% instead of 20%.
EU directives (parent-subsidiary, interest-royalty) — 0% in specific cases.

To apply a reduced rate, you need the counterparty's residency certificate — an official document from their country's tax authority confirming they are tax resident there.

Most common traps

1. No residency certificate. The reduced rate "doesn't apply". The tax office charges the difference plus interest.

2. Outdated certificate. For most payment types, validity is 12 months. After that — useless.

3. Look-through clause (above PLN 2M). For payments above PLN 2M annually to a single counterparty, you must perform due diligence to verify the recipient is the "beneficial owner" rather than a "pass-through".

4. B2B IT payments — service or licence? A classic dispute area. SaaS = service (no WHT). A traditional software licence = royalty (WHT applies). The line is thin.

5. Google/Facebook ads. Surprise — international advertising is theoretically in scope for WHT. Most companies don't compute it. Time to discuss with your accountant.

Penalties

Penalty interest on the withheld amount.
An overpayment may be impossible to recover if the foreign client won't or can't apply for a refund.
In severe cases: fiscal-criminal proceedings.

Practical checklist

For every foreign invoice: ask "is this in scope for WHT?".
If yes: do I have a current residency certificate?
Am I applying the correct treaty rate?
For EU directive exemptions, are all conditions satisfied?

We manage WHT for clients with cross-border activity — from contract audits to IFT-2R returns. Not sure you're handling everything correctly? Start with an audit.