Tax Treaty Case Law around the Globe 2019

S. 2281. Introduction

This chapter will discuss the decision of the Polish Supreme Administrative Court of 27 April 2018, No. II FSK 1370/16. The issue in this case concerned the beneficial owner requirement in the Poland-Sweden Income and Capital Tax Treaty (2004). Due to a disparity in the language versions of the treaty, there was no beneficial owner requirement in the Polish version but there was one in the other two authentic languages (Swedish and English). The court also examined whether a pool leader should be considered the beneficial owner of interest received under a cash pooling structure and whether a company established in Poland should withhold tax on the interest paid to the pool leader for using financial resources made available as part of the cash pooling structure.

Under article 3 of the Corporate Persons Income Tax Act (hereinafter: CPITA), taxpayers are subject to corporate income tax on all of their income, regardless of where its source is located, if they have their registered seat or management board in the territory of the Republic of Poland. Non-residents are liable to corporate tax only on income derived from the territory of Poland. A company is not resident i...