Withholding Tax (WHT) – statistics for 2024 and key information for 2025
Withholding tax (WHT) in Poland remains one of the important tax issue for entrepreneurs engaging in transactions with foreign entities. The year 2024 brought not only significant changes in the number of applications filed and refunds processed but also outlined key obligations to be considered in the upcoming year. Below, we present an analysis of the data and the key issues to plan for in the context of WHT in 2025.
Data analysis for 2024 compared to 2023
There was a significant decrease in the number of WHT-related applications in 2024 compared to 2023:
- WH-WOP applications dropped by 37.7% (from 788 to 491), while WH-WOZ applications decreased by 27.8% (from 237 to 171).
- WH-WCP applications saw a reduction of 27.1% (from 418 to 304), and WH-WCZ applications declined by 39.7% (from 416 to 251).
Despite the lower number of applications, the number of positive opinions (567) remained relatively high. An increase in the authorities’ efficiency in dealing with cases was also noted, with the percentage of positive opinions at 85.7%, compared to 74.4% in 2023.
Tax refunds and overpayments
- The number of refunds based on WH-WCP and WH-WCZ applications increased from 291 in 2023 to 379 in 2024.
- However, the total amount of refunds decreased from PLN 1.52 billion in 2023 to PLN 1.24 billion in 2024, indicating lower average values of refunded overpayments.
- The amount of overpayments identified also declined from PLN 937.97 million in 2023 to PLN 787.64 million in 2024.
Key WHT obligations for 2025
Expiry of WHT preference opinions
WHT preference opinions issued in 2022 will expire in 2025. For businesses, this means the need to renew these opinions, submit a new opinion request, or meet other formal requirements, such as submission of a WH-OSC statement. It is crucial to start preparations early, as the tax authorities have a statutory period of up to six months to issue opinions, and the process can take even longer for complex cases. In addition to the application itself, the relevant documentation, including certified translations, must also be collected, which requires additional time. It’s also important to note that changes in factual circumstances may cause the opinion to expire early (before 36 months). In such cases, companies should promptly consider submitting new applications to avoid the risk of losing its tax preferences.
Pay & refund mechanism
Entrepreneurs should pay special attention to the pay & refund mechanism, particularly when planning payments to foreign associated entities. Under the regulations, a Polish taxpayer who exceeds the annual limit of PLN 2 million for payments to one foreign entity is required to withhold tax at the standard rate on the excess above this threshold. This primarily applies to payments related to passive income, such as dividends, interest, or royalties. It is essential to plan payments carefully and monitor whether the total amount exceeds this limit. If the threshold is exceeded, businesses must apply the pay & refund principle, which means paying tax and later claiming a refund. The regulations also allow for preferential rates, but only if the relevant requirements are met. Therefore, it is advisable to analyze planned transactions already at the beginning of the year and submit applications for preferences to avoid issues with WHT settlement later.
Obligation to submit WH-OSC follow-up statement
Taxpayers who benefited from preferential rates in 2024 must remember to submit a follow-up statement on time by January 31, 2025. This deadline applies to businesses whose fiscal year coincides with the calendar year. Failure to meet this obligation may result in severe financial consequences, including sanctions and the accrual of interest for late payment. Therefore, businesses that made such payments must ensure the statement is filed within the required timeframe. Failure to do so may lead to financial sanctions and additional costs related to late interest.
Consequences of incorrect WHT settlements
Errors in WHT settlements can lead to serious consequences, including:
- Financial penalties – tax authorities may impose significant fines for non-compliance.
- Late interest – accruing from the date the tax should have been paid.
- Penal fiscal liability – for deliberate or gross procedural violations.
- Increased risk of tax audits, which can generate additional costs and involve company resources.
getsix® – professional tax advisory
As mentioned, managing WHT obligations is no simple task. It is a complex process requiring significant time, effort, and resources.
The experts at getsix® provide advisory services regarding WHT settlements, available exemptions, and refund procedures, including the pay & refund mechanism. Contact us for support.
Learn more about getsix® tax advisory services: Tax advisory in Poland.
If you have any questions regarding this topic or if you are in need for any additional information – please do not hesitate to contact us:
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