DZP Tax Practice secures refund of overpaid WHT on dividends paid by Polish companies to EU holding company

Experts from DZP’s Tax Practice have advised in proceedings for an overpayment of withholding tax to be found and refunded, specifically WHT on dividends paid by Polish companies to a holding company based in the EU.

The key challenge was to show that the EU holding company met the statutory conditions for qualifying for withholding tax exemption, particularly that it was the entity entitled to the amounts received and that it did not benefit from tax exemption on its total income (Article 22(4)(4) of the CIT Act).

Regarding exemption from taxation of total income, DZP's experts referred to a general ruling of the Minister of Finance of 15 November 2024 (no. DD9.8202.1.2024), according to which the non-payment of tax in a given tax year, e.g. due to a tax loss or income derived solely from dividends, does not indicate the use of such exemption. This position was of significant importance to the assessment of the holding company's tax position.

Demonstrating an entitlement to dividends in the case of holding companies with predominantly passive income is one of the most challenging issues in Polish WHT practice and is closely scrutinised by the tax authorities. This issue was discussed in more detail Ministry of Finance tax guidance issued in July 2025. During the proceedings, the authority requested extensive documentation concerning, among other things, the group’s structure, employment, assets, management board independence and cash flows. Thanks to effective argumentation and close cooperation with the client, it was confirmed that the partner was the entity entitled to the dividend and that it had not acted as a conduit company.

The proceedings were based on a two-stage strategy: first, opinions were obtained on the application of preferences (WH-WOP), confirming the right to exemption from WHT on future payments (including those exceeding PLN 2 million); then, an application was filed for a refund of the overpayment for 2024. The opinions obtained strengthened the argumentation, which was upheld in the decision delivered.

The strategy adopted yielded tangible benefits for the client: the tax authority found that there had been an overpayment and granted a tax refund, while the opinions obtained on the application of preferences mean that the client does not have to pay WHT on the excess of payments over PLN 2 million for another 36 months.

The case was handled by: Tomasz Leszczewski (Counsel), Joanna Kociołek-Ziemba (Tax Manager), Michalina Grzyb (Tax Consultant) and Jan Czerwiński (Partner).