From 1 January 2022 there is new law in place that changes the rules of collecting withholding tax (WHT). Some changes particularly affect the rules of collecting WHT in case the payments of proceeds are done through entities which maintain securities’ accounts.


New rules implement a pay-and-refund mechanism for passive income (interest, dividends) earned by related parties which exceed PLN 2m in a tax year.

According to Article 26.2ed of the CIT Act, the entity which maintains the securities’ account is responsible for identification if such a relationship exists and the threshold is exceeded.

According to Article 26.2ca of the CIT Act, the payer of the proceeds from securities through an entity which maintains the securities’ account or through omnibus account is obligated to inform that entity about any relationship between the issuer and the taxpayer (the recipient) and about the PLN 2m threshold being exceeded not later than 7 days prior to the payment. The information must be updated prior to the payment if the circumstances change.

The above rules impose additional obligation on issuers of securities, to inform the withholding tax agent about any relationship with the beneficiaries of proceeds from the securities, i.e. bond holders or shareholders and about the threshold being exceeded each time that the payment is made from these securities.

Article 30.5b of the Tax Ordinance Act, which changes the rules of tax liability in such cases, has also been introduced. If the tax is not collected due to the obligation not being fulfilled or if the information being incorrect, the payer of proceeds from securities through entities maintaining the securities’ accounts or omnibus accounts is liable to tax not collected.

That means that issuers of securities may be exposed to risk of liability for the tax not collected by a third party (the tax agent) if the new disclosure obligations are not fulfilled.

It should be also noted that the failure to fulfill the new obligation may constitute a fiscal criminal offence which may be fined by up to 720 of daily rates, according to new rules (Article 50d.1 and 50d.1a of the Fiscal Criminal Code).

The new obligation may raise questions as for the:

  • Situations in which the obligation to disclose arises,
  • The scope and the content of the disclosure,
  • The communication between the issuer and the tax agent,
  • The way of management of the tax risk stemming from the new law.

Since the rules have been introduced as of 1 January 2022 means that the new obligations may already arise.

In case of any questions related to the new obligations, please contact us.