The end of the state of epidemic emergency – check the validity of certificates of residency

As of July 1, 2023, the COVID-19 state of emergency was revoked, thereby restoring certain tax deadlines and obligations previously suspended for the duration of this special state.

One of the most important changes relates to the expiration dates of so-called tax residency certificates, allowing Polish entities to apply preferential withholding tax (WHT) rules to realized payments of certain receivables (dividends, interest, royalties, remuneration for intangible services) to foreign counterparties.

In accordance with the facilitations introduced for the duration of the epidemic state and the state of epidemic emergency, certificates of residency remained valid for the duration of such special state and for another 2 months after its cancellation.

The cancellation of the epidemic emergency on July 1, 2023 means that some certificates of residency used earlier will remain valid only until the end of August 2023. The basic rules for determining the validity of certificates of residency also return – they are valid for the expiration date indicated on the certificate in question, or for 12 months from the date of issuance in the absence of such a date (unless significant changes occur).

It is worth noting that the lack of a current certificate of residence means the obligation to collect withholding tax at the basic rate of 19% or 20% – instead of applying a preferential rate or exemption

What is worth doing?

Polish entities making payments of receivables to foreign counterparties should – before making further payments – review their certificates of residence and make sure they are up-to-date, and supplement those that will expire any moment.

We are at your disposal – if you need any assistance in analyzing your certificates of residence, we invite you to contact us.