Cloud services and withholding tax in Poland – Supreme Administrative Court of Poland (NSA) rulings on server infrastructure

A Polish company purchasing hosting or cloud capacity from a foreign provider should not assume that the payment falls outside withholding tax (WHT Poland). In its judgment of 4 March 2026, case no. II FSK 757/23, the Supreme Administrative Court of Poland (NSA) held that a server used for business purposes may constitute industrial equipment and that paid use of allocated server space may be subject to WHT.

This was not an isolated ruling. The NSA has referred to earlier judgments concerning access to servers and cloud space. In its judgment of 5 February 2026, case no. II FSK 1098/25, the court expressly stated that, under the current NSA case law, services providing access to server space used for data storage are classified as the use of industrial equipment. The absence of physical access to the server does not therefore determine that WHT does not apply.

Cloud services and withholding tax in Poland are an important issue for Polish companies purchasing hosting, server capacity, development environments or other IT infrastructure resources from foreign providers. From a finance department’s perspective, the question is no longer simply whether the company physically leases a particular server. Current NSA case law indicates that virtual use of specific server space or resources may also be relevant.

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Are cloud services subject to withholding tax in Poland?

They may be subject to WHT if the payment is classified as consideration for the use of, or the right to use, industrial, commercial or scientific equipment. This does not, however, mean that every payment for an IT service or every cloud solution is automatically subject to withholding tax.

Article 21(1)(1) of the Polish Corporate Income Tax Act covers, among other items, income earned by non-residents from the use of, or the right to use, industrial equipment, including means of transport, as well as commercial or scientific equipment. The Polish domestic tax rate for payments covered by this provision is 20% of revenue.

This provision must, however, be applied with due regard to the relevant double taxation agreement (DTA). Determining that a payment falls within Article 21(1)(1) of the Corporate Income Tax Act is therefore only the first stage of the analysis.

For cross-border payments, it is then necessary to establish, among other matters, the recipient’s tax residence, the provisions of the applicable DTA and the conditions for applying any preferential treatment available under that agreement. In particular, the supplier’s tax residence certificate, the beneficial owner status of the recipient and the payer’s compliance with the required due diligence standard may be relevant.

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What did the NSA rule on hosting services on 4 March 2026?

In its judgment of 4 March 2026, case no. II FSK 757/23, the NSA adopted a broad, functional interpretation of the term “industrial equipment”. According to the court, a server may fall within this category even if it is not used directly in a traditional manufacturing process.

The case concerned a Polish software company purchasing data-processing environment rental services from a German supplier. The service included the rental of cloud space, meaning that a specified amount of server disk capacity was made available for storing databases. The space was also used in connection with providing customers with access to a SaaS platform.

The company argued that it did not use the server itself, but only the space made available through it. The resources were distributed across multiple servers and accessed virtually over the Internet. The NSA did not, however, consider this distinction sufficient to exclude the payments in question from WHT.

According to the court, the functional aspect of the equipment is relevant to its classification. The concept of industrial equipment is not limited to machinery used directly in the production of tangible goods. The NSA held that equipment used in professional business operations and connected with commercial activity may fall within this concept.

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Is this an isolated ruling on hosting services?

No. The judgment of 4 March 2026 forms part of a broader line of NSA case law concerning the use of servers and cloud space. The NSA itself noted that it had previously considered an analogous legal issue, including in its judgment of 16 May 2024, case no. II FSK 1078/21.

The NSA judgment of 5 February 2026, case no. II FSK 1098/25, is also relevant. The court stated that, under the current NSA case law, access to servers involving the use of allocated space for storing data, files, databases or other resources is classified as the use of industrial equipment.

The NSA referred, among others, to the following judgments:

• 16 May 2024, II FSK 1078/21;
• 7 March 2025, II FSK 1598/24;
• 5 August 2025, II FSK 1449/22;
• 30 October 2025, II FSK 183/23;
• 2 December 2025, II FSK 268/23.

In judgment II FSK 1098/25, the NSA also emphasised that the absence of physical access to equipment does not automatically exclude WHT where the taxpayer actually uses specific server resources in its business activities.

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Why does the lack of physical access to a server not resolve the WHT issue?

Several years ago, one of the main arguments raised by taxpayers was the distinction between physically leasing equipment and purchasing a service delivered using that equipment. Recent NSA judgments have reduced the practical significance of this distinction.

In its judgment of 30 October 2025, II FSK 183/23, the NSA held that equipment may also be used virtually. The court stated that a server remains equipment regardless of whether the user has physical access to it and whether it operates through a network and appropriate software.

A similar approach follows from the judgment of 5 February 2026. The mere fact that data is accessed over the Internet and that the customer has no access to the server room does not, therefore, mean that the payment should be treated solely as consideration for an intangible service.

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Hosting, cloud services and WHT – what follows from the current NSA case law?

Circumstance	Conclusion based on current NSA case law
Use of specified server space	May be regarded as the use of industrial equipment
No physical access to the server	Does not determine that WHT does not apply
Infrastructure is accessed over the Internet	The virtual nature of access does not automatically exclude Article 21(1)(1) of the Corporate Income Tax Act
The server is not directly involved in production	Under the current NSA case law, this does not prevent it from being classified as industrial equipment
Payment generally relates to an IT service or SaaS	It cannot automatically be classified in the same way as the provision of server space

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Is every cloud service or SaaS subscription subject to WHT in Poland?

No. The case law concerning hosting and server space does not justify automatically treating every cloud solution or SaaS subscription as consideration for the use of industrial equipment. This distinction is important.

In practice, terms such as “cloud”, “hosting” and “SaaS” may cover very different services. A customer may purchase a specified amount of storage capacity, access to computing power or a dedicated environment, but may instead be paying primarily for access to application functionality. Tax classification should therefore follow the actual nature of the service rather than its commercial label alone.

Judgment II FSK 757/23 concerned a specific model in which the taxpayer was provided with specified server space used to store databases and in connection with making a SaaS platform available. It should not be interpreted as meaning that every licence or subscription for cloud-based software is automatically subject to WHT as the use of industrial equipment.

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What should a company check before paying for hosting or cloud services?

From the perspective of a Polish payer, one of the main risks is classifying a payment solely on the basis of the description shown on the invoice.

Before paying a foreign provider, the company should consider at least the following questions:

• What does the Polish company actually receive?
  Is it paying for application functionality, or is it given access to specified storage capacity, computing power or other infrastructure resources?
• Does the remuneration depend on infrastructure parameters?
  Relevant factors may include the number of servers, memory capacity, disk space, computing power or the volume of allocated resources.
• Does the company use the allocated resources directly in its business?
  Under current NSA case law, the functional connection between the infrastructure and the company’s business activities is relevant.
• Does the contract cover several different services?
  A package may combine hosting, software, technical support, data storage and other services. In such cases, it may be necessary to determine the nature of the individual components of the remuneration.
• In which country is the supplier resident?
  After analysing the Polish Corporate Income Tax Act, the company should review the applicable DTA and the conditions for applying the rate available under that agreement.
• Does the company have the appropriate tax documentation?
  This includes verifying the supplier’s tax residence certificate and the documents required to apply the relevant WHT rules. Depending on the legal basis for preferential treatment, it may also be necessary to verify the recipient’s beneficial owner status and comply with the required due diligence standard.

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What does the current NSA approach mean for finance departments in Poland?

The key practical conclusion is that the absence of a physical server on the Polish company’s premises should not be treated as sufficient grounds for concluding that WHT does not apply.

This is particularly relevant to models in which a business is given access to specified technical resources – such as memory, disk space or a server environment – and uses them in its business activities. Current NSA case law clearly increases the tax exposure associated with such models. In its judgment of 5 February 2026, the court itself described the line of case law concerning access to server space as consistent, referring to several earlier judgments.

This does not mean, however, that a finance department should automatically withhold tax from every invoice issued by a foreign digital services provider. The first step is to establish exactly what the payment covers.

For hosting and cloud services, the actual scope of the service and the way in which the server infrastructure is used are crucial. We discussed earlier NSA judgments and the obligations of Polish payers in more detail in our article on withholding tax on payments for hosting services.

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Cloud services and WHT in Poland – how can companies reduce the risk?

When purchasing cloud services from a foreign provider, the WHT analysis should be completed before payment, particularly where the contract provides access to disk space, computing power, a server or another specified infrastructure resource.

In practice, companies should review not only the invoice but also the supplier agreement, the technical description of the service, the remuneration model and the scope of the resources made available to the customer.

If a company uses foreign hosting, cloud infrastructure or other IT services and is uncertain about their WHT treatment, the specific service model should be analysed before subsequent payments are made.

getsix® supports businesses with withholding tax in Poland analysis and tax advisory in Poland, including the classification of payments to foreign contractors, analysis of applicable double taxation agreements and verification of the payer’s obligations.

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Case law:

• Supreme Administrative Court, judgment of 4 March 2026, case no. II FSK 757/23.
• Supreme Administrative Court, judgment of 5 February 2026, case no. II FSK 1098/25.
• Supreme Administrative Court, judgment of 16 May 2024, case no. II FSK 1078/21.

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