WHT: New Guidance on the Obligation to Verify Beneficial Owner Status

The guidance specifies the types of payments that trigger the obligation to verify the beneficial owner status of the recipient, provided the payer intends to apply a WHT exemption or a preferential tax rate. According to the Ministry of Finance, this obligation applies only to passive payments, including:

• interest,

• royalties,

• dividends and other profit distributions paid by Polish-resident legal entities.

The introduction of a closed list of payment types subject to beneficial owner verification helps limit payer obligations. This is especially relevant in light of past controversies over intangible service payments, such as for advisory, management or marketing services. According to the guidance, these payments do not require beneficial owner verification to benefit from a tax exemption or reduced rate.

The guidance also clarifies how to apply WHT exemptions for dividend payments made to foreign entities, under the EU Parent-Subsidiary Directive (PS Directive). Specifically:

• The exemption applies only if the beneficial owner of the dividend is tax resident in an EU Member State,

• Conduit companies lacking real economic substance may be excluded from tax preferences,

• In chain structures, only the entity that actually receives the profit distribution can be recognized as the beneficial owner—regardless of the number of entities in the chain.

Furthermore, the guidance covers cases where the WHT relief is applied directly under a double tax treaty (DTT). Even if a DTT does not explicitly refer to a “beneficial owner” but instead uses terms like “paid to a resident”, the interpretation should follow the Vienna Convention—meaning the provisions should be read in light of their purpose, which is to eliminate double taxation, not to avoid taxation altogether.

Therefore, regardless of the exact wording of a particular DTT, the payer must always verify the beneficial owner status to apply any WHT relief.