Effective 1/1/2019, dividends, interest, and royalty payments from Poland will meet higher tax rates, and timing/permanent differences based on a “pay and refund” system.
Statutory tax rates of 19%/20% will be applicable, unless certain pre-conditions are applied for, which may not be certain or provided timely.
These provisions will impact current cash flows with potential adverse consequences on the annual ETR, resulting in additional proactive actions (i.e. providing statements for lower withholding no later than early January, etc.) to mitigate such actions to the extent possible.
EY’s Global Tax Alert provides additional insight on this significant development for multinationals. Hopefully, other countries will not “follow the leader” by enacting similar actions.