On December 30, 2020, a regulation regarding the exclusion or limitation of the application of art. 26 par. 2e of the Corporate Income Act (CIT Act) and a draft regulation regarding the exclusion or limitation of the application of art. 41 par. 12 of the Personal Income Act (PIT Act) providing for the extension of the deadline related to the fulfillment of obligations resulting from the new rules for collecting withholding tax (WHT) until 30 June 2021, has been published in the Journal of Laws of the Republic of Poland.
This is another extension of the deadline related to the rules for collecting withholding tax (WHT). In case of CIT taxpayers the entry into force of new withholding tax (WHT) collection mechanism has already been rescheduled four times - it was planned initially on 1 July 2019, then on 1 January 2020 and on 1 July 2020 and lately - on 1 January 2021. This time, the regulations on the new withholding tax collection (WHT) mechanism will be postponed until 30 June 2021.
Meanwhile, in case of PIT taxpayers, the new obligations imposed on withholding tax remitters had been in force for half a year - from 1 July 2019 to 31 December 2019 - and then, according to the amendments to the PIT Act, regulations were suspended from 1 January 2020 to 30 June 2020 and them from 30 June 2020 to 31 December 2020. However, the Minister of Finance again decided to extend the deadline related to the fulfillment of obligations resulting from the new rules for collecting withholding tax (WHT) until 30 June 2021.
This time, the extension of the deadline related to the rules for collecting withholding tax (WHT) was connected with the exceptional conditions of conducting the legislative process in the time of the COVID-19 pandemic and the longer-than-expected legislative process related to the revision of the statutory provisions on the withholding tax (WHT).
A new mechanism for collecting withholding tax (WHT) covered by the amendments to the CIT Act and PIT Act, provides for the obligation to collect tax if the total amount of receivables paid in one taxable year to one taxpayer exceeds PLN 2 million.
Both of the amending regulations entered into force on 31 December 2020.
What does it mean to me?
Postponement till the end of June 2021 of deadlines of the entering into force of the legislation covering the withholding mechanism applies only to the situation, when the payment amount exceeds PLN 2 million and does not exclude other obligations imposed on the tax remitters by new regulations as of January 1, 2019, including an obligation to ensure required due care while verifying the conditions to apply WHT exemption or preferential WHT rates.