Tax Treaty Case Law around the Globe 2018
1. Aufl. 2019
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S. 265Chapter 23 Poland: Definition of Industrial Equipment and Payments for the Lease of Computer Hardware with Respect to Royalties
Karolina Tetłak
23.1. Introduction
This chapter will discuss the decision of the Supreme Administrative Court of 18 May 2017, No. II FSK 1204/15. The issue in this case was whether a company established in Poland should withhold tax on the gross amount of lease payments for computer hardware under the Germany-Poland Income and Capital Tax Treaty (hereinafter Germany-Poland double tax convention, DTC).
Under article 3 of the Corporate Persons’ Income Tax Act (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 in Poland if it is not incorporated or managed in Poland.
Business income is taxed at the rate of 19% of net income. The withholding tax rate applicable to interest and royalties received by non-residents in Poland is 20% of gross income (article 21(1)(1) of the CPITA). Ho...