International tax and tax residence
Polish regulations provide for far-reaching verification obligations for payments to foreign entities, even if EU laws or double taxation treaties provide for more favourable rules. Therefore, we assist our clients by:
- determining the correct withholding tax rates on interest, dividends and royalties,
- verifying the accessibility of exemptions, reliefs and credits,
- analyse Controlled Foreign Company laws,
- verify the tax implications for financial hybrid structures (ATAD2 regulations),
- analyse the risk of there being a permanent establishment of a foreign business in Poland,
- establish the arm’s-length basis of transactions between the headquarters and a permanent establishment by analysing the key functions and risks,
- prepare methodologies for calculating so-called free capital (a form of quasi-equity of the Polish branch of a foreign entity),
- verify tax residence based on OECD guidelines, e.g. based on the location of the registered office or place of management, or (for natural persons) centre of vital interests.
In today’s rapidly changing economic environment, many people frequently change their country of residence, including for very long periods. Such changes may also result in a change of tax residence, which may involve tax liability. For such individuals, we:
- determine the marginal conditions for changing tax residence,
- analyse the duty to account for the tax on unrealised income (so-called exit tax),
help calculate the exit tax liability by analysing assets and performing market value estimates.