Marcelina Szwed-Ziemichód

Marcelina Szwed-Ziemichód

Can withholding tax be a tax-deductible cost in Poland?

WHT as a tax cost in Poland

The payment of remuneration to a foreign counterparty may result in an obligation to deduct the WHT (withholding tax) from the remuneration due. Often, a contract concluded with a foreign entity contains a so-called gross-up clause. In such case, the withholding tax deducted does not influence the amount of remuneration remitted, and the amount of withholding tax is actually borne by the Polish business operator. The question arises whether the withholding tax can be a tax-deductible cost.