Poland plans to extend the temporary withholding tax exemption for technical payers, including securities account operators, until the end of 2026.
Poland’s Ministry of Finance has released a draft regulation for public consultation on 11 August 2025, proposing to extend the temporary exemption from the pay and refund withholding tax mechanism for technical payers, including securities account operators.
The pay and refund system, introduced for most taxpayers in 2022, requires withholding tax at standard domestic rates on passive income payments to foreign related parties exceeding PLN 2 million per year per party, unless specific conditions are met. Technical payers have been exempt from this mechanism due to challenges in identifying related parties and determining whether the threshold applies.
The proposed extension would maintain the exemption until 31 December 2026, beyond the current expiry date of 31 December 2025. Despite the exemption, technical payers remain required to conduct due diligence to confirm the legitimacy of reduced tax rates or exemptions.
