18 February 2026

Withholding Tax (WHT), part 2: Intangible Services

Welcome to another article in the series on WHT – this time on popular intangible services. The legislator has introduced a list of intangible services for which withholding tax must be collected upon payment (to a foreign contractor). The legislator specified in Article 21, Section 1, Item 2a of the Corporate Income Tax Act that the following intangible services are subject to withholding tax:

1. consulting, accounting, market research, legal, advertising, management and control, data processing, employee recruitment and acquisition, guarantees and sureties;
2. similar services (to the services indicated in point a).

In addition to the explicitly named intangible services (listed in point a), the legislator also used the imprecise term “similar service”, which may raise doubts. At the same time, due to this construction of the regulations, the list of intangible services is open-ended. Similar services have not been defined – consequently, the nature of a given transaction must be assessed on a case-by-case basis to determine whether it qualifies for mandatory withholding tax.

It is assumed that for a given service to be considered a similar service, it must contain at least 50% of the service explicitly listed in the regulation (see point a), to which the similar service refers. Therefore, mere similarity to services explicitly listed in the regulations (for example, consulting services) does not automatically determine whether it will be a similar service – the degree of similarity between these services must be assessed individually.

Tax Collection (Intangible Services)

If a payment is made to a foreign entity (without its registered office or management in Poland, subject to limited tax liability in Poland), the payer (i.e., a domestic taxpayer) is obligated to calculate, collect, and pay the tax as the tax remitter.

The tax rate for this type of service is 20%, and the deadline for payment of withholding tax is the 7th day of the month following the month in which the payment was made, and the tax was collected.

Application of the Double Taxation Agreement (DTA)

Based on a typical double taxation treaty, intangible services referred to in Article 21, Section 1, Item 2a of the Corporate Income Tax Act (CIT Act) qualify as business profits. Therefore, under the provisions of the DTA, intangible services are subject to taxation only in the country of residence of the taxpayer receiving remuneration for intangible services.

An exception is when a foreign taxpayer conducts business in Poland through a permanent establishment located in Poland. In such a situation, these payments may also be taxed in Poland. However, it is necessary to attribute to the permanent establishment the profits it could have earned if it had performed the same or similar activities under the same or similar conditions as an independently operating enterprise.

Important: The DTA introduces a definition of a permanent establishment: a permanent establishment means a fixed place of business through which a foreign enterprise conducts all or part of its business in the territory of another country – typical DTAs include, for example, a place of management, a branch office, an office, a factory, a workshop, a mine or quarry, or a construction site – that lasts longer than 12 months. Furthermore, activities of a preparatory or auxiliary nature, such as storage, display, or delivery of goods or merchandise, or activities for advertising or research purposes, are not considered a permanent establishment.

As a consequence of applying the provisions of the DTT, payments made to foreign entities for intangible services may be exempt from withholding tax, provided that certain conditions are met:

• the tax residence of the foreign entity must be confirmed by means of a certificate of residence issued by the relevant tax authority for the foreign entity.
• due diligence must be exercised when verifying the conditions for preferential treatment (exemption) from withholding tax, in accordance with Article 26, Section 1 of the Corporate Income Tax Act.

If the above conditions are met, withholding tax is not required.