United States has signed an Income Tax Treaty (2013) with Poland on 13 February 2013 which will replace the existing agreement, signed 1974. The new treaty provides for reductions in withholding taxes on cross-border payments of dividends, interest and royalties. The withholding tax on dividends is limited to 15% or to 5% where the recipient of the dividend owns at least 10% of the voting stock in the company paying the dividend.
Withholding tax on interest and royalties is restricted to 5% with a number of exemptions apply. A contracting state may apply a branch profits tax subject to certain conditions. Methods for attributing business profits to permanent establishment also incorporates in new treaty which have been developed by the Organization for Economic Cooperation and Development (OECD) and are consistent with U.S. tax treaty policy.
