Poland

Corporate - Withholding taxes

Last reviewed - 10 July 2020

Domestic provisions: General rules

The general domestic WHT rate for dividends is 19%. Dividends also encompass income from liquidation of a company and the income from the redemption of shares (with the exception of gain from voluntary redemption, which is treated as a capital gain subject to the 19% CIT rate in Poland if the gain is realised by a taxpayer from a non-treaty country or the treaty includes a so-called 'real estate clause').

The general WHT rate on interest and royalties paid to non-residents is 20% (10% regarding services of sea or air transportation). These WHT rates may be reduced by DTTs.

There is also a 20% WHT on payments made to non-residents for intangible services (such as consulting services). However, if a payment is made to a country that has a DTT with Poland, this tax may be avoided with the completion of certain minimal administrative formalities. Few treaties treat payments for technical services as royalties (e.g. India).

The 'beneficial owner' definition determines that entities receiving royalties and interests must constitute the beneficial owner in order to apply the exemption from WHT tax on interest and royalties.

As of 1 January 2019, a new mechanism of settlement of WHT in relation to payments exceeding PLN 2 million per annum for each taxpayer has been introduced. Under the new rules, the conditional exemption from WHT or application of the reduced tax rate stipulated in the applicable DTT is restricted.

With regard to payments not exceeding PLN 2 million per annum for each taxpayer, the remitter is still entitled to apply a reduced WHT rate or WHT exemption according to the current rules (though some additional requirements are imposed on the tax remitter).

The new mechanism allows the remitters not to withhold tax in relation to payments exceeding PLN 2 million per annum if the remitter submits a statement confirming that:

  • it possesses all documents necessary for applying reduced WHT rate or exemption from WHT, and
  • it is not aware of any circumstances that speak against granting tax exemption.

The remitter will be held accountable as to the completeness of the documents and correctness of the facts considered during the certification process (fines and penalties, including imprisonment under the Fiscal-Penal Code, will apply). In addition, a penalty of 10% to 30% of the tax base may be imposed if, during a tax audit, the tax authorities question the results of the certification process.

In compliance with the new mechanism, the taxpayer/remitter shall have the right to claim for a WHT refund. 

Alternatively, the taxpayer or the remitter that incurred the economic cost of WHT and meets certain conditions stipulated in the CIT Law shall be able to apply to the tax authorities for an opinion confirming that tax may not be withheld.

Published on 28 June 2019, the amending regulation to the Ordinance of the MoF of 31 December, regarding the exclusion or limitation of the application of art. 26 par. 2e of the Corporate Income Act (CIT Act), provided for the extension of the deadline related to the fulfilment of obligations resulting from the new rules for collecting WHT until 31 December 2019. On 31 December 2019, the deadline was extended to the end of June 2020.

The amended Ordinance limits the application of the provision excluding exemptions/reduced rates for payments exceeding the threshold of PLN 2 million until the end of June 2020 in relation to, among others, payments for dividends, interest, and intangible services, and with regard to payments for use of or the right to use commercial, scientific, or industrial equipment, as well as transport means or payments made for international traffic of goods and passengers (in both cases, the condition is that there is a legal basis for the exchange of tax information).

Special treatment: EU Directives

The CIT law provisions and certain EU Directives provide special treatment for dividends, interest, and royalties paid to numerous European countries.

In general, the transitional rules on interest and royalty payments paid by Polish corporate residents to associated EU or EEA companies, as well as the full exemption after 1 July 2013, only apply to interest and royalty payments between associated companies (parent-subsidiary relationships or sister-sister relationships) in which capital involvements are significant, i.e. the paying company owns or is owned at least 25% by the company receiving interest or the company that pays interest and the company that receives interest are owned at least 25% by the same parent company. Shareholding should be kept for a minimum of two consecutive years.

Dividends paid to corporate residents of EU and EEA countries are exempt from WHT, subject to certain conditions specified in the CIT law. The basic requirement is that the foreign beneficiary holds at least 10% of the shares in the Polish company for a minimum of two consecutive years.

In relation to all given payments (i.e. dividends, interest, royalties), the condition regarding holding shares is also fulfilled if two years passes after the day of the dividend/interest/royalty payment. If the period is interrupted afterwards, the company is obligated to pay the tax at the standard rate with interest.

Note that several additional conditions have to be met for the reduced rate/exemption from the WHT based on the Directive to be applied (e.g. the company receiving the dividend/interest/royalty cannot be exempt from tax on all its income, regardless of its source; the recipient has to have ownership title to the shares in the Polish company).

Additionally, the CIT law states that in order to enjoy the exemption from WHT on dividends and decreased WHT rate on interest and royalties, based on the Directives’ provisions, the relevant DTT or other agreement concluded by Poland should allow exchange of tax information between the tax authorities of Poland and the country of the payment recipient.

Given the fact that Poland did not conclude a DTT with Liechtenstein, payments made to tax residents of Liechtenstein should not benefit from the Directive.

Treaty rates

If EU special rules do not apply, the domestic WHT rates can be decreased by a DTT concluded between Poland and the payment recipient’s country of residence if certain administrative conditions are met (i.e. the payer obtains a valid certificate of a fiscal residence of the payment recipient/beneficial owner).

The following table lists the WHT rates as provided in the treaties concluded by Poland. Notably, the following table shows only rates that result from general treaty provisions; the treaties themselves occasionally include special provisions (applicable in special circumstances or to special entities) that provide lower WHT rates than the ones listed.

Furthermore, if a treaty rate is higher than a domestic one, the latter should apply.

Recipient WHT (%)
Dividends Interest Royalties
Non-treaty 19 20 20
Treaty:      
Albania 5 (1)/10 10 5
Armenia 10 5 10
Australia 15 10 10
Austria 5 (3)/15 0 (4)/5 5
Azerbaijan 10 0 (2)/10 10
Bangladesh 10 (5)/15 0 (6)/10 10
Belarus 10 (7)/15 10 0
Belgium 5 (8)/15 0 (9)/5 5
Bosnia & Herzegovina (Yugoslavian Treaty) 5 (1)/15 10 10
Bulgaria 10 0 (10)/10 5
Canada 0/15 0 (11)/15 0 (12)/10
Chile 5 (13)/15 5/15 (85) 5 (14)/10/15 (86)
China, People’s Republic of 10 0 (15)/10 10 (16)/10 of 70 (14)
Croatia 5 (1)/15 0 (15)/10 10
Cyprus 0 (17)/5 0 (79)/5 5 (87)
Czech Republic 5 0 (80)/5 10 (81)
Denmark 0 (19)/5 (20)/15 0 (21)/5 5
Egypt 12 0 (22)/12 12
Estonia 5 (23)/15 0 (24)/10 10
Finland 5 (23)/15 5 5
France 5 (3)/15 0 0 (25)/10
Georgia 10 0 (26)/8 8
Germany 5 (3)/15 0 (27)/5 5
Greece 19 (73) 10 10
Hungary 10 0 (10)/10 10
Iceland 5 (23)/15 0 (10)/10 (74) 10
India 15 0 (28)/15 22.5
Indonesia 10 (13)/15 0 (10)/10 15
Iran 7 0 (29)/10 10
Ireland, Republic of 0 (30)/15 0 (31)/10 0 (82)/10
Israel 5 (32)/10 5 5 (14)/10
Italy 10 0 (33)/10 10
Japan 10 0 (34)/10 0 (35)/10
Jordan 10 0 (10)/10 10
Kazakhstan 10 (36)/15 0 (37)/10 10
Korea, Republic of 5 (3)/10 0 (38)/10 5 (39)
Kyrgyzstan 10 0 (40)/10 10
Kuwait 0 (41)/5 0 (42)/5 15
Latvia 5 (23)/15 0 (43)/10 10
Lebanon 5 0 (37)/5 5
Lithuania 5 (23)/15 0 (10)/10 10
Luxembourg 0 (88)/15 0 (44)/5 5
Macedonia 5 (23)/15 0 (10)/10 10
Malaysia 0 (45) 0 (46)/15 0 (47)/15
Malta 0 (77)/10 (76) 0 (2)/5 5 (78)
Mexico 5 (23)/15 0 (48)/5 (49)/15 10
Moldova 5 (23)/15 0 (37)/10 10
Mongolia 10 0 (10)/10 5
Montenegro (Yugoslavian Treaty) 5 (23)/15 10 10
Morocco 7 (18)/15 10 10
Netherlands 5 (3)/15 0 (75)/5 5
New Zealand 15 10 10
Norway 0 (50)/15 0 (4)/5 5
Pakistan 15 0 (51)/20 15 (52)/20 (53)
Philippines 10 (23)/15 0 (54)/10 15
Portugal 10 (55)/15 0 (56)/10 10
Qatar 5 0 (84)/5 5
Romania 5 (23)/15 0 (43)/10 10
Russia 10 0 (57)/10 10
Saudi Arabia 5 0 (83)/5 10
Serbia (Yugoslavian treaty) 5 (23)/15 10 10
Singapore 5 (58)/10 5 2 (14)/5
Slovak Republic 0 (18)/5 0 (43)/5 5
Slovenia 5 (23)/15 0 (60)/10 10
South Africa 5 (23)/15 0 (10)/10 10
Spain 5 (1)/15 0 0 (35)/10
Sri Lanka 10 0 (61)/10 0 /10 (62)
Sweden 5 (23)/15 0 5
Switzerland 0 (20, 50)/15 5 5
Syria 10 0 (63)/10 18
Taiwan 10 10 3 (89)/10
Tajikistan 15 0 (40)/10 10
Thailand 20 0 (59)/10 0 (64)/5 (65)/15
Tunisia 5 (1)/10 12 12
Turkey 10 (23)/15 0 (10)/10 10
Ukraine 5 (23)/15 0 (37)/10 10
United Arab Emirates 0 (66)/5 0 (10)/5 5
United Kingdom 0 (67)/10 0 (68)/5 5
United States 5 (69)/15 0 10
Uzbekistan 5 (70)/15 0 (71)/10 10
Vietnam 10 (23)/15 10 10 (72)/15
Zimbabwe 10 (23)/15 10 10

Notes

  1. When the beneficial owner is a company that directly holds at least 25% of the capital of the company paying the dividends.
  2. When interest is paid to the government, the central bank of the state, including local authorities or other government bodies.
  3. When the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the company paying the dividends.
  4. When interest is paid to the government, a political subdivision, or a local authority in connection with:
    • a loan granted, insured, or guaranteed by a governmental institution for the purposes of promoting exports
    • a sale on credit of any industrial, commercial, or scientific equipment, or
    • any loan granted by a bank.
  5. When the beneficial owner is a company that directly holds at least 10% of the capital of the company paying the dividends.
  6. When the interest is paid:
    • to the Central Bank of Poland
    • to the Central Bank of Bangladesh
    • to the government of the Republic of Poland or the government of the Republic of Bangladesh, or
    • in respect of a loan made or guaranteed or insured by the government of the other state, or any agency including a financial institution owned or controlled by the government.
  7. When the beneficial owner is a company (other than a partnership) that directly holds at least 30% of the capital of the company paying the dividends.
  8. When the beneficial owner is a company (other than a partnership):
    • that directly holds at least 25% of the capital of the company paying the dividends or
    • that directly holds at least 10% of the capital of the company paying the dividends, and the value of investments in the company is at least EUR 500,000 or is equal to the amount in the other currency.
  9. When interest is paid:
    • on a loan granted, guaranteed, or insured, or a credit granted, guaranteed, or insured, by a general system organised by the state, including political subdivisions or local authorities for purposes of promoting exports
    • on a loan of whatever kind, except in the form of bearer securities, granted by a banking company, or
    • to other states, including political subdivisions and local authorities.
  10. When interest is paid to the government, including local authorities, to the central bank or any financial institution controlled by that government, or on loans guaranteed by that government.
  11. When interest is paid in respect of a loan made, guaranteed, or insured by the state or agreed public body.
  12. Copyright royalties and other similar payments in respect of the production or reproduction of any literary, dramatic, musical, or artistic work (not including royalties in respect of motion picture films and works on film or videotape for use in connection with television).
  13. When the beneficial owner is a company that directly controls 20% of the voting stock of the company paying the dividends.
  14. For the use of, or the right to use, any industrial, commercial, or scientific equipment.
  15. When interest is paid:
    • to the government, a local authority, and the central bank or any financial institution wholly owned by that government or
    • to the other resident of the other state with respect to debt-claims indirectly financed by the government of the other state, a local authority, and the central bank or any financial institution wholly owned by the government.
  16. For the use of, or the right to use, any copyright of literary, artistic, or scientific work, including cinematograph films, and films or tapes for radio or television broadcasting, or any patent, know-how, trademark, design or model, plan, secret formula, or process.
  17. The Protocol of 22 March 2012 has entered into force. The Protocol introduces a maximum 5% rate of WHT on dividends and exempts dividends paid to an immediate parent company (other than partnership) that owns at least 10% of the capital of the company paying the dividend.
  18. When the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the company paying the dividends in a period of 24 consecutive years.
  19. When the beneficial owner is a company (other than a partnership) that directly holds at least 25% of the capital of the company paying the dividends, where such holding is being possessed for an uninterrupted period of no less than one year and the dividends are declared within that period.
  20. When the beneficial owner is a pension fund or other similar institution providing pension schemes in which individuals may participate in order to secure retirement benefits, when such pension fund or other similar institution is established, recognised for tax purposes and controlled in accordance with the laws of the other state.
  21. When interest is paid:
    • on a loan of whatever kind granted, insured, or guaranteed by a financial institution owned or controlled by the state
    • in connection with the sale on credit of any industrial, commercial, or scientific equipment
    • in respect of a bond, debenture, or other similar obligations of the government of the state, or of a political subdivision or local authority, or
    • to the other state, or to a political subdivision or local authority.
  22. When interest is paid to the government of the other state, including local authorities and the central bank.
  23. When the beneficial owner is a company (other than a partnership) that directly holds at least 25% of the capital of the company paying the dividends.
  24. When interest is paid to the government of the other state, including political subdivisions and local authorities, the central bank, or any financial institution owned by the government or on loans guaranteed by the government.
  25. From copyright of literary, artistic, or scientific work.
  26. When the beneficial owner is the government of the other state or central bank.
  27. When the interest, subject to certain exceptions related to silent shareholders, is paid:
    • to the government of Poland or Germany on a loan of whatever kind granted, insured, or guaranteed by a public institution for purposes of promoting exports
    • in connection with the sale on credit of any industrial, commercial, or scientific equipment
    • in connection with the sale on credit goods between companies, or
    • on any loan of whatever kind granted by a bank.
  28. If the following conditions are met:
    • Interests paid to:
      • the government, a political sub-division, or a local authority of the other contracting state or
      • the central bank of other contracting state.
    • When the beneficial owner is a resident of the other contracting state and is derived in connection with a loan or credit extended or endorsed by:
      • Bank Handlowy (in scope of financing export and import) - for Poland
      • the Export-Import Bank of India (in scope of financing export and import) - for India
      • any institution in the other contracting state in charge of public financing of external trade, or
      • any other person, provided that the loan or credit is approved by the government of the first mentioned contracting state.
  29. When the beneficial owner is the government, ministry, other governmental institution, municipality, central bank, or any other bank wholly owned by the government of the other contracting state.
  30. When the beneficial owner is a resident of the other contracting state and directly holds at least 25% of the voting power of the company paying the dividends.
  31. Interest paid in connection with:
    • the sale on credit of any industrial, commercial, or scientific equipment
    • the sale on credit of any merchandise by one enterprise to another, or
    • on any loan of whatever kind granted by the bank.
  32. When the beneficial owner is a company that directly holds at least 15% of the capital of the company paying the dividends.
  33. If the following conditions are met:
    • When the payer of interests is the government or contracting state or a local authority of thereof.
    • Interest is paid to the government of other contracting state or local authority thereof (including financing institutions) wholly owned by other contracting state or local authority thereof.
    • Interest is paid to any other entity, including financial institutions, in relation to loans made in application of an agreement concluded between governments of contracting states.
  34. When beneficial owner is the government of other contracting state, including local authorities thereof, the central bank, any financial institutions controlled by that government or any resident of the other contracting state with respect to debt-claims, guaranteed or indirectly financed by institutions mentioned above.
  35. For payments connected with copyrights, literary, artistic, and scientific activity, including payments connected with films for cinemas and films and tapes for TV.
  36. When the beneficial owner is a company that directly or indirectly holds, at least 20% of the capital of the company paying the dividends.
  37. When interest is paid to the government or local authorities.
  38. Interest arising in a contracting state in respect of loans or credits made, insured, or guaranteed:
    • in the case of Korea, by the Export-Import Bank of Korea, Korea Development Bank, Korea Finance Corporation (KoFC), Korea Trade Insurance Corporation (K-sure), Korea Investment Corporation, and any other financial institution, performing similar functions of a governmental nature, established and owned by the government of Korea, and
    • in the case of Poland, by the Korporacja Ubezpieczeń Kredytów Eksportowych S.A (KUKE S.A.), Bank Gospodarstwa Krajowego (BGK), and any other financial institution, performing similar functions of a governmental nature, established and owned by the government of Poland, and
    • paid to a resident of the other contracting state shall be taxable only in that other state.
  39. If the recipient is the beneficial owner.
  40. Interest paid to government or central bank.
  41. When the beneficial owner is:
    • the government of the other contracting state, entity, or any governmental institution or
    • a company that is a resident of the other contracting state and at least 25% of its capital is directly or indirectly owned by the entities mentioned above.
  42. If the following conditions are met:
    • When the beneficial owner is:
      • the government of the other contracting state, entity, or governmental institution or
      • a company that is a resident of the other contracting state and at least 25% of its capital is owned directly or indirectly by the entities mentioned above.
    • When interest is paid in connection with loans guaranteed by the entities mentioned above.
  43. When interest is paid:
    • to the government, including the local authorities, to the central bank or any financial institution controlled by that government, or on loans guaranteed by that government or
    • to the resident in the other contracting state.
  44. If the following conditions are met:
    • When the beneficial owner is other contracting state.
    • When interest is paid in connection with loans and credits granted by bank.
  45. Dividends paid by:
    • a resident of Poland to a resident of Malaysia who is subject to Malaysian tax in respect thereof or
    • a resident of Malaysia to a resident of Poland who is subject to Polish tax in respect thereof.
  46. Interest paid to resident of Poland on an approved loan or a long-term loan.
  47. Royalties paid to resident of Poland by resident of Malaysia and approved by the competent authority of Malaysia.
  48. If the following conditions are met:
    • When the beneficial owner is:
      • a contracting state, a political subdivision, or a local authority, or The National Bank of Poland or Banco de Mexico or
      • a recognised pension or retirement fund provided that its income is generally exempt from tax in this state.
    • When interest:
      • is paid by any of entities mentioned above
      • arises in Poland and is paid in respect of a loan for a period not less than three years granted, guaranteed, or insured by Banco de Comercio Exterior, S.N.C., Nacional Financiera, S.N.C. or Banco National de Obras y Servicios Publicos S.N.C., or
      • arises in Mexico and is paid in respect of a loan for a period not less than three years granted, guaranteed, or insured by PKO S.A., Corporation of Credit Insurance, and Bank Handlowy in Warsaw.
  49. If the following conditions are met:
    • When the beneficial owner is a bank or insurance company.
    • When interest is derived from bonds and securities that are regularly and substantially traded on a recognised securities market.
  50. When dividends are paid to the company that directly holds at least 10% of the capital paying the dividends on the day they are paid and has done (or will do) so for an interrupted 24-month period from which that date falls.
  51. When interest is paid:
    • by a resident of Pakistan to a Polish company or enterprise on loans approved by the MoF of the government of Pakistan
    • to the State Bank of Pakistan from sources in Poland, or
    • to Bank Handlowy in Poland from the sources in Pakistan.
  52. For payments of any kind received in consideration for the use of, or the right to use:
    • any copyright, patent, trademark, design or model, plan, secret formula, or process
    • an industrial, commercial, or scientific equipment, or
    • motion picture films, and works on films and videotapes for use in connection with television.
  53. For payments received in consideration of technical know-how concerning industrial, commercial, or scientific experience.
  54. Interests paid in respect of:
    • a bond, debenture, or other similar obligations of the government, state, political subdivision, or local authority thereof or
    • a loan or credit extended, guaranteed, insured, or refinanced by:
      • Central Bank of Philippines - for Philippines
      • Central Bank of Poland - for Poland, or
      • other lending institutions as specified and agreed in letters of exchange between competent authorities of the contracting states.
  55. When dividends are paid to the company that directly holds at least 25% of the capital stock of the company paying the dividends for an uninterrupted 24-month period prior to the payment.
  56. If the following conditions are met:
    • When the debtor of such interests is the government, a political subdivision, or local authority.
    • When the interest is paid to the government of other contracting state, a political subdivision, or local authority thereof, or an institution or body in connection with any financing granted by them under an agreement between the governments of the contracting states.
    • Loans or credit made on central banks of contracting states and any other financial institution controlled by the state and financing external business that may be agreed upon between the competent authorities of the contracting states.
  57. Interests paid to government, administrative, territorial, or the central bank.
  58. Dividends paid by:
    • the company that is a resident of Singapore to a resident of Poland (as long as Singapore does not impose a tax on dividends in addition to the tax chargeable on the profits or income of a company) or
    • to government of either contracting state with respect to shares in joint stock companies of that other state.
  59. Interest paid to government.
  60. Interests paid to government, local authorities, or the central bank.
  61. Interest accrued in a contracting state and generated by the government of the other contracting state, including local authorities, a central bank, or any financial institution controlled by that government, shall be exempt from tax in the first contracting state.
  62. When the recipient of a royalty that is a resident of a contracting state is a beneficial owner of the payment.
  63. If the following conditions are met:
    • When recipient is a contracting state, or one of its local authorities, or the statutory body of either, including the central bank; or when interests are paid by a contracting state, or one of its local authorities, or the statutory body of either.
    • Such interest is paid in respect of any debt-claim or loan guaranteed, insured, or supported by a contracting state or another person acting on state’s behalf.
  64. Payments payable to contracting state or a state owned company in respect of tape or films.
  65. Royalties made as consideration, for the alienation, or the use of, or the right to use, any copyright of literary, artistic, or scientific work, excluding cinematographic films or tapes for television or broadcasting.
  66. When the beneficial owner is the government or a government institution.
  67. When dividends are paid to a company that is the resident of the other contracting state and that directly holds at least 10% of the capital, paying the dividends on the day they are paid and has done (or will do so) for an uninterrupted 24-month period from which that date falls.
  68. When interests are paid to the government, a political subdivision, or a local authority in connection with:
    • a loan granted, insured, or guaranteed by a governmental institution for the purposes of promoting exports
    • the sale on credit of any industrial, commercial, or scientific equipment, or
    • any loan granted by a bank.
  69. When the beneficial owner is a company that directly holds at least 10% of the outstanding shares of the voting stock of the company paying the dividends.
  70. When the beneficial owner is a company that directly holds at least 20% of the capital of the company paying the dividends.
  71. When the beneficial owner is:
    • the government or a local authority or
    • the National Bank of Poland or the Central Bank of Uzbekistan Republic.
  72. For payment of any kind, received in consideration, for the use of, or the right to use:
    • any patent, design or model, plan, secret formula, or process or
    • any information concerning industrial or scientific experience.
  73. Treaty allows application of the domestic tax rate.
  74. As long as Iceland does not levy tax at source of income, interest is taxable only in the contracting state of which the beneficial owner of the interest is a resident.
  75. When interest is paid to the government, a political subdivision, or a local authority in connection with:
    • a loan granted, insured, or guaranteed by a governmental institution for the purposes of promoting exports
    • a sale on credit of any industrial, commercial, or scientific equipment
    • any loan granted by a bank
    • in respect of a bond, debenture, or other similar obligations of the government of a contracting state, or of a political subdivision or local authority thereof, or
    • to the other contracting state, or to a political subdivision or local authority thereof.
  76. When the tax is charged by Poland.
  77. When the dividends are paid by a company resident of Poland to a resident of Malta that directly holds at least 10% of the capital company paying the dividends on the date they are paid and has done so or will have done so for an uninterrupted 24-month period in which that date falls.
  78. When the recipient is the beneficial owner.
  79. According to the Protocol of 22 March 2012, which has entered into force, the maximum WHT rate on interest paid is 5%. However, when interest is paid to the government, including political sub-divisions and local authorities, the central bank, or any statutory body of the state with respect to loans or credits made or guaranteed by the government of the other state, including political sub-divisions and local authorities, the central bank, or any statutory body of the other state, it shall be exempt from tax in the first mentioned contracting state.
  80. There is a WHT exemption on interest payable: (i) on any loan or credit granted by a bank; (ii) to the government of the other contracting state, including any political subdivision or local authority thereof, the central bank, or any financial institution owned or controlled by that government; or (iii) to a resident of the other state in connection with any loan or credit guaranteed by the government of the other state, including any political subdivision or local authority thereof, the central bank, or any financial institution owned or controlled by that government. The maximum rate of WHT on interest is 5%.
  81. The maximum WHT rate on royalties is 10%.
  82. The lower rate applies to fees for technical services.
  83. When interest is paid: (i) by the government of a contracting state, administrative subdivision, or local authority thereof; (ii) to the government of the other contracting state, administrative subdivision, or a local authority thereof; or (iii) to the central bank of the other contracting state or a corporate body (including financial institution) controlled or owned by that state, a political or administrative subdivision, or local authority thereof.
  84. If the recipient of the interest is the beneficial owner and interest is paid: (i) to the Republic of Poland or the State of Qatar; (ii) on a loan of whatever kind granted, insured, or guaranteed by a public institution for purposes of promoting exports; (iii) in connection with the sale on credit of any industrial, commercial, of scientific equipment; or (iv) on any loan of whatever kind granted by a bank.
  85. The treaty rate is 15% for all types of interest. However, by virtue of a most-favoured-nation clause of the protocol (and since the Chile-Spain treaty provides a reduced rate), the rate is reduced to 5% in respect of interest (i) paid to a bank or insurance company or (ii) derived from bonds or securities that are regularly and substantially traded on a recognised securities market.
  86. The general treaty rate is 15%. However, by virtue of a most-favoured-nation clause of the protocol (and since the Chile-Spain treaty provides a reduced rate), the rate is reduced to 10%.
  87. The Protocol of 22 March 2012 has not changed the WHT rate in relation to royalties; however, the beneficial owner clause was introduced. Additionally, the new DTT amends the definition of ‘royalties’.
  88. When the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the company paying the dividends, where such holding is being possessed for an uninterrupted period of no less than two years and the dividends are declared within that period.
  89. When royalties are paid for the use of, or right to use, industrial, commercial, or scientific equipment.