Tax Treaty Case Law around the Globe 2022
1. Aufl. 2023
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22.1. Introduction
The issue in the case decided by the Polish Supreme Administrative Court on (II FSK 126/19) concerned taxation of the payment of royalties made to a Mexican association of filmmakers under article 21(1)(1) of the Polish Corporate Income Tax Act (CITA) and article 12(2) of the Poland-Mexico Income and Capital Tax Treaty (1998) (the Treaty), in particular, whether a Mexican organization associating Mexican artists and selling copyrights to their works qualifies as the beneficial owner of royalties and whether tax should be withheld in Poland on such payments.
Pursuant to article 21(1)(1) of the CITA, payments to non-resident legal persons for copyright or related rights are subject to tax at the rate of 20%.
Article 12(1) of the Treaty stipulates that royalties arising in a contracting state and paid to a resident of the other contracting state mat be taxed in that other state. However, pursuant to article 12(2) of the Treaty, such royalties may also be taxed in the state in which they arise and according to the laws of that state, but if the recipient is the beneficial owner of the royalties, the tax so charged may not exceed 10% of the gross amount...