Poland’s Ministry of Finance has initiated a public consultation regarding a draft regulation proposing the extension of the temporary exemption withholding tax under the “pay and refund” (MPR) mechanism until 31 December 2025, allowing “technical remitters” to avoid withholding flat-rate personal and corporate income taxes on passive income payments exceeding PLN 2 million.
The rates are set at 19% for dividends and similar income and 20% for royalties, interest, and intangible service payments.
The MPR mechanism mandates default withholding tax without reductions from Polish, EU, or relevant tax treaties. This mechanism has faced periodic suspensions or limitations, with the latest extension lasting until 2024. The latest proposal seeks to extend this exemption until the end of 2025.
The draft regulation was published in the Public Information Bulletin on 4 November 2024. Comments on the draft should be submitted within 7 days from the date of its publication.
