Tax Treaty Case Law around the Globe 2018
1. Aufl. 2019
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S. 289Chapter 25 Poland: Taxation of Royalties for Computer Software
Karolina Tetłak
25.1. Introduction
This chapter will discuss the decision of the Supreme Administrative Court of , II FSK 1961/15. The issue in this case concerned payments made to an Irish company for the licence to use computer software and for the purchase of equipment with software installed. The Court’s decision considered whether such payments should be classified as royalties and whether a company established in Poland should withhold tax on the gross amount of such payments under the Ireland-Poland Income Tax Treaty (1995) (hereinafter the Ireland-Poland double tax convention, DTC).
Pursuant to article 3 of the Corporate Persons’ Income Tax Act of 26 July 1991 (CPITA), taxpayers are subject to corporate income tax on all 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 inco...