Poland’s dividend tax framework has shifted dramatically. A series of Court of Justice of the European Union (CJEU) rulings, new guidance from the Ministry of Finance, and evolving case law now dictate the rules of engagement. Asset managers, pension funds, insurers, and corporate treasuries who still rely on outdated methods risk unnecessary compliance exposure. This article explains the latest changes to dividend WHT recovery in Poland and sets out the key steps for investors.
The CJEU ruling: discriminatory barriers removed
In February 2025, the CJEU struck down Poland’s rule that forced foreign investment funds to appoint an external management company to qualify for the domestic dividend exemption. Self-managed funds, previously excluded on technical grounds, can now access the exemption and pursue refunds. The decision eliminates a long-standing bias in favour of Polish funds and broadens access to dividend WHT recovery.
Poland has already prepared a legislative follow-up. A July 2025 draft bill proposes to extend exemptions to more funds, including certain non-EU vehicles, starting in 2026. However, lawmakers made it clear that the new regime will not apply retroactively. Investors must rely on EU law and recent judgments to recover tax from earlier years.
Dividend exemption after 2024: clarity on “effective taxation”
In late 2024, the Ministry of Finance clarified one of the most disputed issues in dividend taxation. The dividend exemption applies only if the recipient pays tax on worldwide income in an EU or EEA country and does not enjoy a full exemption.
The ruling confirmed that a dividend exempt in the hands of the recipient under Parent-Subsidiary Directive rules does not block access to the exemption. This gave cross-border groups a more predictable basis for planning. At the same time, Polish courts reaffirmed that entities entirely exempt from tax on worldwide income cannot benefit. The form of the investor remains decisive.
Beneficial ownership: July 2025 guidance tightens the rules
On 9 July 2025, the Ministry of Finance released new binding guidance on the beneficial owner (BO) test. To qualify, the recipient must control the dividend, avoid any legal or factual obligation to pass it on, and conduct genuine business in its state of residence. Groups may rely on shared resources, but only within narrow treaty and EU limits.
The Supreme Administrative Court added an important clarification in October 2024. The court ruled that Polish dividend payers do not need to verify BO status when applying the exemption for payments under PLN 2 million. Once payments exceed that threshold and fall into the pay-and-refund regime, however, payers must provide a BO statement. Compliance obligations therefore change depending on the route chosen.
Pay-and-refund after PLN 2 million: documentation is decisive
When dividends to related parties exceed PLN 2 million annually, Poland’s pay-and-refund regime activates. Payers must withhold tax at 19% and claim a refund unless they file a statement confirming eligibility and complete documentation.
Above this level, tax offices demand stronger evidence. They test the entire structure, the BO analysis, and the supporting documentation. Investors who treat the process casually often lose both time and cash. Below the threshold, relief at source remains possible with lighter checks, but exceeding PLN 2 million requires a fully resourced compliance programme.
Interest on overpaid WHT: a missed opportunity if ignored
The CJEU also rejected Poland’s limits on interest for overpayments that breach EU law. Taxpayers now have a clear right to interest from the date of overpayment until the refund date. Poland has started adjusting its rules, but investors already benefit from the new standard.
Firms that file refund claims without adding interest calculations leave money on the table. Including this element turns recovery into a stronger cash-flow tool.
Limitation periods: time kills claims
Poland’s general statute of limitations gives taxpayers five years from the end of the year in which tax became due. That sets the outer boundary for most claims. Some double tax treaties shorten the window to three or four years.
Portfolio managers who fail to track both deadlines risk losing valid claims. Effective dividend WHT recovery in Poland requires dual monitoring of statutory and treaty timelines.
Look-through relief: authorities retreat
Taxpayers often argue that an intermediary holding company should not block treaty relief if the real beneficial owner sits behind it. Although courts have sometimes accepted this approach, recent rulings show the tax authority stepping back from look-through relief.
This inconsistency raises litigation risk. Investors using layered structures must document commercial purpose and prove the chain of payments to survive scrutiny. Assuming look-through will apply is no longer safe.
Strategic takeaways for investors
The CJEU judgment opened the door for self-managed EU funds to reclaim dividend tax. Waiting for the 2026 legislative reform means losing earlier recoveries. Claims should move forward now under existing EU principles.
The Ministry’s 2024 ruling narrowed “effective taxation” concerns. Only entities fully exempt on their worldwide income face outright exclusion. The July 2025 BO guidance provides a practical compliance blueprint. Below PLN 2 million, relief at source remains viable. Above that, the pay-and-refund regime requires structured preparation.
Investors should also model interest on refunds and track limitation deadlines carefully. Both elements turn recoveries into stronger results and reduce leakage.
Looking ahead: the 2026 reform
The draft law planned for 2026 will broaden exemptions to cover more fund types, including some outside the EU. Yet the law offers no retroactive benefit and introduces new reporting duties. These changes create both opportunities and compliance challenges.
Investors should prepare now by building flexible structures and maintaining thorough documentation. Early action will protect recovery rights and allow smoother adaptation once the reform arrives.
With WHT rules in Poland changing rapidly, outdated processes risk both compliance failures and lost value. At Global Tax Recovery, we deliver compliance certainty while ensuring that recoveries turn into tangible cash-flow improvements.
This article provides general information only. It does not constitute tax or legal advice. Always seek specialist advice for your specific situation.
