Polish tax authorities now accept the “look-through approach” for the dividend withholding tax exemption. Companies can use the approach when the direct shareholder is not the beneficial owner. However, they must meet strict conditions and ensure that the structure is not abusive. This significantly improves the position of multinational firms using intermediary holding companies in their Polish investment chains.
Dividend withholding tax exemption: how to secure it
The ruling of the Director of National Revenue Information confirms the right to apply the Polish dividend withholding tax exemption. The taxpayer may look through an intermediary holding company to the ultimate beneficial owner in another EU member state. The ruling addresses a common problem for multinational firms. How to secure WHT exemption in Poland when the direct shareholder has limited substance and is not the real economic recipient of the dividend.
Background: Polish dividend withholding tax regime
As a rule, Polish capital companies must withhold 19% tax on dividends under the Corporate Income Tax Act (CIT Act). An applicable double tax treaty can reduce this domestic rate, while the dividend withholding tax exemption can eliminate it entirely. The exemption implements the EU Parent‑Subsidiary Directive.
To apply the exemption, the taxpayer must meet the following core statutory conditions simultaneously:
- the payer is a Polish company;
- the recipient is an EU/EEA (or certain other) corporate taxpayer subject to CIT on worldwide income;
- the recipient directly holds at least 10% of the shares for at least two consecutive years;
- and the recipient is not fully exempt from income tax on all of its income.
In practice, the payer must also collect a tax residency certificate and declarations confirming that the recipient meets the exemption conditions.
The practical problem: intermediary holding companies
The ruling concerns a Polish limited liability company (A Sp. z o.o.) that is part of a multinational structure. Its sole shareholder is B GmbH, a German holding company. B GmbH conducts no genuine operational business, has few personnel or assets, and mainly holds and finances foreign investments. C GmbH sits above B GmbH. This German firm is a major manufacturer with substantial business substance, hundreds of employees and extensive operations in Germany.
C GmbH makes the key decisions and receives the group’s profits. However, the Polish company pays the dividend to B GmbH, its direct shareholder. The key question was whether the Polish payer could apply the dividend withholding tax exemption by looking through B GmbH to C GmbH. This approach assumes that B GmbH is not the dividend’s beneficial owner.
Facts and question in the individual ruling
The Polish company asked whether it could apply the exemption as WHT remitter. B GmbH, the direct shareholder, was not the beneficial owner. The company would use the look-through approach and treat C GmbH as the relevant recipient. The company explained that C GmbH holds 100% of B GmbH’s shares for more than two years. C GmbH is a German tax resident, conducts genuine business and pays tax on worldwide income, including dividends received through B GmbH.
The tax authority accepted this description and confirmed that the taxpayer’s position is correct. In the described scenario, the payer may apply the dividend withholding tax exemption by referring to C GmbH as the actual owner of the dividend and EU‑resident taxpayer, provided additional conditions are satisfied. The tax authority issued this confirmation as an individual interpretation with protective effect. The protection applies if the facts remain consistent with those described in the ruling.
Practical implications for foreign boards and tax teams
This development allows foreign boards and tax professionals to align Polish WHT planning more closely with the economic reality of group structures. Taxpayers no longer need to rely solely on formal shareholding chains. Where a holding company without business substance sits between the Polish payer and a substantive EU parent, the Polish firm may, in appropriate circumstances, apply the dividend withholding tax exemption by referring to the parent, not the intermediary.
However, the bar for documentation and analysis has increased. Tax authorities expect a clear understanding of the payment chain, the identification of the beneficial owner and evidence that each condition is met at the level required. Anti‑abuse scrutiny remains intense, particularly in structures involving low‑tax jurisdictions, hybrid instruments or entities with minimal substance. Taxpayers therefore need robust functional and factual support.
How we can help your firm
Designing, documenting and defending a dividend withholding tax exemption strategy in Poland is now more nuanced than ever. Especially for firms with complex cross‑border holding chains. We support foreign boards and tax teams throughout the process. From structuring and feasibility analysis to day‑to‑day WHT compliance and representation before the tax authorities.
If your firm is planning or already making dividend payments from Poland to foreign shareholders and wants to secure the most efficient and defensible WHT outcome, we invite you to contact us to discuss your specific situation.
Source: Individual tax ruling issued by the Director of the National Tax Information on 9 September 2026, reference no. 0111-KDIB1-2.4010.369.2026.1.BD.
Written by Wojciech Jasiński