Tax consultancy

Withholding Tax (WHT) is one of the most complex areas of the Polish and international tax systems, posing a significant challenge for entities cooperating with foreign contractors. The obligation to collect tax on dividends, interest, royalties, and certain intangible services places the Polish payer in the role of guarantor of fiscal settlements. Given the stringent regulations, including the pay & refund mechanism and the broad definition of beneficial owner, correctly settling WHT is no longer a matter of mathematics but a process requiring the highest standards of due diligence.

From the moment a cross-border transaction is identified, our support focuses on protecting the payer from liability for uncollected tax and ensuring the right to apply preferential rates under double taxation treaties. Unlike standard tax processes, managing withholding tax requires continuous verification of the counterparty's status and collecting documentation confirming their entitlement to an exemption or reduced tax rate. Our support in this area includes a comprehensive examination of the payee's tax residence, analysis of the business substance of foreign entities, and verification of residency certificates. Records of these activities must be maintained systematically and documented so that, in the event of a tax audit, the payer can demonstrate that they have made every effort to verify their entitlement to preferential treatment.

At BTTP, we implement internal WHT procedures that automate verification processes and minimize the risk of human error when processing international transfers. Much controversy surrounds the rules for applying for a refund of overpaid tax and the process of obtaining an exemption opinion, which is the only effective way to avoid the "upfront" tax collection mechanism for payments exceeding PLN 2 million. We offer full support in representing clients before tax authorities, preparing applications for withholding tax refunds, and preparing management declarations necessary for applying tax preferences. We analyze the correct treatment of WHT in accounting records, report on IFT-1/IFT-1R and IFT-2/IFT-2R forms, and properly account for gross-up payments in tax-deductible costs.

Professional WHT management is the foundation of credibility in relationships with global business partners, which is why we analyze each settlement from the perspective of fiscal security and client cost optimization.