Collective Tax Residency Certificates – Practical Step Forward

In a recent article for Prawo.pl (Wolters Kluwer), Piotr Prokocki, Head of Tax at Penteris, comments on an important development in Polish tax practice: the acceptance of collective tax residency certificates by the National Tax Information Office (KIS). This shift promises to ease the compliance burden on Polish companies making cross-border payments to foreign, tax-transparent entities.

“Collective certificates simplify withholding tax procedures for payments made to tax-transparent entities with a dispersed ownership structure,” explains Piotr Prokocki.

Until now, companies were often required to collect individual tax residency certificates from every partner or beneficiary in such structures — a cumbersome and sometimes impossible task, particularly in the case of large foreign partnerships or investment vehicles. The new position allows the use of a single certificate confirming the tax residency of all partners, issued by a relevant foreign tax authority.

“This is a major relief, particularly in cases involving payments to large foreign firms or funds made up of numerous investors,” adds Prokocki.

The interpretation offered by KIS aligns with established tax principles and remains consistent with Polish PIT and CIT legislation.

“This is a step towards greater certainty and efficiency in the application of withholding tax rules,” Prokocki concludes.

At Penteris, we welcome such practical developments that reduce red tape and help businesses operate with greater legal clarity.

For further insights from our Tax Practice, feel free to get in touch with Piotr Prokocki or explore our publications.