On August 18, 2026, draft regulations were published on the website of the Government Legislation Centre, extending the temporary exclusion from the application of the pay & refund mechanism ("MPR") for technical withholding agents under both Corporate Income Tax (CIT) and Personal Income Tax (PIT).
What does the extension of the MPR exclusion concern?
The draft regulations provide for the extension until December 31, 2028, of the existing exclusion from the pay & refund mechanism for so-called technical withholding agents (entities maintaining securities accounts or omnibus accounts) and issuers. This exclusion applies where the total amount of payments made exceeds PLN 2,000,000 and is relevant to both CIT (Article 26(2c) of the CIT Act) and PIT (Article 41(4d) and (10) of the PIT Act).
Why are the changes being introduced?
The decision to extend the MPR exclusion is driven by the inability of technical withholding agents to fully meet their obligations and the necessity to align domestic regulations with the EU's FASTER Directive (Council Directive (EU) 2024/50 of 10 December 2024). The implementation deadline for the FASTER Directive is December 31, 2028, and its adoption will impact withholding tax (WHT) relief procedures, especially concerning dividends on publicly traded shares.
What obligations remain in force?
It must be emphasized that the suspension of the MPR does not exempt technical withholding agents from the obligation to exercise due diligence when verifying eligibility for tax preferences (this is also explicitly stated in the explanatory memorandum to the new regulation). Technical withholding agents remain liable for withholding the correct amount of tax and can be held accountable—including under the Fiscal Penal Code—if irregularities are found.
In this regard, it should be noted that we are already observing the first tax audits conducted by the Tax and Customs Offices concerning the correct application of WHT preferences in cases involving technical withholding agents.
When will the regulations enter into force?
According to the draft projects, the regulations are set to enter into force on December 31, 2026.
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