Month: July 2025

We are delighted to share the news that GWW has received the highest distinction in this year’s Chambers High Net Worth 2025 ranking. GWW’s Private Client team has once again been included in this prestigious list, which recognises the best law firms providing legal and tax services to private clients.

1st place – Band 1

in the Private Client team category

1st place – Band 1

in the individual category for Aldona Leszczyńska-Mikulska, head of the Private Client team

Associates to Watch distinction

for Tomek Piejak, counsel in the Private Client team

The ranking website features recommendations from our clients: https://chambers.com/department/gww-private-wealth-law-high-net-worth-21:2633:173:1:126560

Chambers rankings are one of the most recognised sources of legal services quality assessment in the world – they are based on independent research and interviews with clients and market professionals.

This time, the case concerned CIT exemption on the sale of shares in a subsidiary 🏢➡️🏢

One of the conditions for benefiting from the exemption is that more than 50% of the subsidiary’s assets must not consist of real estate located in Poland.

The Director of the National Tax Administration agreed with GWW’s position that the term ‘real estate’ in the CIT Act should be understood in accordance with the definition in the Civil Code and that even if the majority of the subsidiary’s assets in the balance sheet are:

• ‘fixed assets under construction’,
• ‘advances for fixed assets under construction’,
• this does not automatically mean that we are not entitled to the exemption, and each item must be analysed individually in terms of the definition of ‘real estate’ in the Civil Code. (ref. 0111-KDIB2-1.4010.175.2025.3.DD).

This is very good news, especially for holding companies selling shares in subsidiaries that are still at an early stage of investment and should not be automatically excluded from the exemption.

We would also like to remind you of an earlier landmark ruling by the Supreme Administrative Court, which was received by our experts. In case II FSK 1425/24, the Supreme Administrative Court upheld our argument and confirmed that by requiring information on the status of all dispersed shareholders, including entities listed on stock exchanges and, indirectly, natural persons, the claimant (GWW’s client) was imposed obligations that were impossible to fulfil.

As the Supreme Administrative Court emphasised at the time, in such exceptional circumstances, in order to ensure the fair and effective application of the law, it is necessary to depart from a rigid literal interpretation in favour of a purposive interpretation.

 

Details: https://gww.pl/przelomowy-wyrok-nsa-w-sprawie-zwolnienia-holdingowego-sukces-zespolu-gww/

 

This is further confirmation that an efficient approach to regulations, good argumentation and knowledge of the practices of authorities allow for the effective protection of taxpayers’ interests.

 

Co-authors of the entry: Sebastian Gumiela, Patrycja Woźniewska, Julia Dziedzic, Przemysław Matyja

On 3 July 2025, the Ministry of Finance (MoF) issued long-awaited tax explanations on the application of the so-called beneficial owner clause (BO) in the context of withholding tax (WHT).

What is the beneficial owner clause?

The BO clause is a mechanism designed to prevent the abuse of tax preferences under double taxation agreements (DTAs) and EU directives (the Parent-Subsidiary and Interest-Royalties Directives). Its application ensures that tax benefits are granted only to the entity that is the ultimate economic beneficiary, rather than the legal recipient of the payment.

The explanations remind us that the concept of ‘beneficial owner’ is not purely formal. Its essence lies in an economic meaning rather than a strictly legal approach.The requirement of beneficial ownership must be examined with respect to payments such as:

• dividends
• interest
• licence fees

However, it does not apply to payments for intangible services (e.g. consulting, advertising), which as a business profit should not be subject to WHT.

Three conditions for the definition of beneficial owner

Pursuant to the provisions of the CIT Act and the PIT Act, an entity qualifies as the beneficial owner of a receivable only if it meets all of the following three conditions:

1. receives the receivable for its own benefit, including having the right to independently decide how to use it and bearing the economic risk of losing all or part of that receivable,
2. is not an intermediary, representative, trustee, or other entity  obliged to pass on all or part of the receivable to another entity,
3. carries out genuine business activity in the country of its seat, if the receivables are obtained in connection with its business activity, and when assessing whether the entity conducts genuine business activity, account is taken of the nature and scale of the activity conducted by the entity in relation to the receivable obtained.

 

As emphasised by the MoF, each of these conditions must be analysed in the context of the specific payment. Moreover, mere formal compliance with the above-listed conditions is not sufficient where an economic analysis suggests otherwise.

What is particularly important is that the MoF explanations set out specific conditions and circumstances that clarify how the criterion of genuine business activity should be understood. Following the case law of the Court of Justice of the European Union, this criterion should be associated with the existence of adequate business substance (in terms of assets and personnel).

The indicators of genuine business activity may vary depending on whether the entity is a manufacturing or trading company, a service company, or one engaged in financial activities in the broad sense (such as investment or holding activities). In certain respects, however, the criteria for conducting genuine business activity remain universal. These include, in particular: whether the entity owns assets; maintains physical office premises; employs staff; pays invoices related to its ongoing operations; engages (or has) management personnel with sufficient experience and knowledge of the transactions under review; possesses its own capital to finance its activities; and conducts business operations independently and on its own account.

It is worth noting that the MoF stated that the use of assets and personnel resources belonging to another company within the group does not, in itself, prevent a finding that the entity carries out genuine business activity. However, in such a case, the taxpayer or tax remitter must be able to explain the circumstances of this situation and demonstrate that, despite this, the entity carries out genuine business activity.

Holding companies

The MoF recognises the specific nature of the business substance requirement in the case of holding companies. For such entities, the possession of material and human resources generally means having appropriately experienced personnel who are genuinely involved in the company’s operations, possess sufficient expertise, and are equipped with adequate office infrastructure (unless other circumstances indicate the absence of such substance).

Look-through approach – an alternative gateway to preferences

The concept of the beneficial owner of a payment is closely linked to the so-called look-through approach (LTA), which is based on the idea of determining the tax consequences of a given payment as if it were made directly to the beneficial owner, notwithstanding the involvement of other entities required to forward the payment. The LTA has not been expressly incorporated into Polish tax legislation, and its practical application has raised certain doubts. The MoF’s guidelines represent a significant step forward in this respect and indicate, inter alia, that:

1. the application of the LTA is optional for the tax remitter (the tax authorities are not obliged to apply it),
2. it requires appropriate evidence to be provided in the relevant documents submitted to the tax authorities.

 

In accordance with the MoF guidelines, in order to apply the LTA, the tax remitter should determine:

1. the beneficial owner of the receivable,
2. whether the beneficial owner recognises taxable income in its country of residence with respect to the receivable,
3. whether the payments made along the chain of entities are of the same nature, and
4. whether the conditions for the tax preference applicable to the given payment are satisfied in relation to each entity involved in the “payment chain.”

 

Due diligence standard – what must the tax remitter do?

In order to mitigate the possible tax risk, tax remitters are required to exercise due diligence by documenting that the recipient of the payment is entitled to the tax exemption or reduced rate. In view of the issued explanations, it is strongly recommended to review the documentation gathered to date for WHT purposes and to ensure appropriate documentation is also in place for future payments.

For many capital groups, the issuance of the explanations requires a comprehensive review of ownership structures and financial flows with respect to WHT rates applied. At the same time, the explanations create an opportunity to shift the authorities’ position on certain aspects of applying WHT preferences, for instance in the context of ongoing tax audits or proceedings concerning requests for opinions on the application of preferences or WHT refunds. This, in turn, may enable the execution of payments that have been suspended for some time due to ongoing tax disputes with the tax authorities in this regard.

We are pleased to announce that attorney Agnieszka Żabicka and legal advisor Marta Wegner-Sarzyńska have been promoted to the position of senior associate.

Marta Wegner-Sarzyńska has extensive experience in civil and commercial litigation and real estate law. She provides clients with support in enforcement proceedings and in matters related to the enforcement of claims. She also deals with bankruptcy and restructuring cases and issues related to the employment of foreigners in Poland.

Agnieszka Żabicka specialises in commercial and economic law, providing ongoing services to large and medium-sized enterprises and advising them on transactions, including M&A. In addition, she has been comprehensively representing clients in litigation involving entrepreneurs for many years.

This promotion is a recognition of their knowledge, professionalism and development within the firm. We are delighted to be building GWW together as an environment for development and cooperation.

Congratulations to Agnieszka and Marta!

‘VAT payer on the sale of plots of land – is this the end of the problems or the beginning of new ones?’ – an article by our VAT experts Małgorzata Militz and Angelika Dahms appeared in the July issue of Przegląd Podatkowy.

Is the sale of private plots of land always a business activity for VAT purposes?

The CJEU judgment of 3 April 2025 sheds new light on who can be considered a VAT taxpayer when selling land from private property.

The dispute in this regard, which has been ongoing since 2004, has gained a new dimension, once again with the involvement of the Court of Justice of the European Union. This time, the CJEU addressed the issue of the independence of activities in the sale of land by natural persons, as well as the issue of ‘marital’ companies, or more generally, ‘two-person’ taxpayers selling such plots of land.

Will the new ruling end years of uncertainty in the interpretation of the law? Or will it open the door to further disputes?

Details of the case, key conclusions and expert commentary are now available in the article by Małgorzata Militz and Angelika Dahms, LL.M., in the July issue of Przegląd Podatkowy (Tax Review) – ‘VAT taxpayer on the sale of plots of land – is this the end of the problems or the beginning of new ones?’

On 9 July 2025, GWW lawyers, tax advisor Artur Bubrowiecki and attorney Kamil Szczęsny, represented a GWW client in a hearing before the Supreme Administrative Court in case no. II FSK 1425/24, brought by the Director of the Tax Administration Chamber in Warsaw against the judgment of the Provincial Administrative Court in Warsaw of 5 June 2024 (case no. III SA/Wa 907/24), concerning the refusal to confirm an overpayment of corporate income tax for 2022.

It should be noted at the outset that the Provincial Administrative Court in Warsaw, in its judgment favourable to GWW’s client, indicated, first of all, that an analysis of the conditions for obtaining the status of a Polish holding company shows that the requirement to obtain information on the status of all dispersed shareholders (stockholders), including entities listed on stock exchanges and, indirectly, natural persons, the applicant (GWW’s client) was imposed obligations that were impossible to fulfil. The court emphasised that the provisions cannot therefore be interpreted in such a way as to impose impossible obligations on the beneficiary (such action would directly violate the principle of trust in the state and the law expressed in Article 2 of the Polish Constitution).

The Supreme Administrative Court, in its judgment (ref. no. II FSK 1425/24), the first, as it seems, in this type of case, dismissed the cassation appeal of the tax authority, stating that the client of GWW in this particular case (this should be emphasised, as the Supreme Administrative Court also did so at least twice in the oral grounds for its decision) had, in its opinion, taken all possible measures (which the Court listed verbatim during the hearing) to identify potential indirect shareholders from territories or countries excluding the application of the holding exemption referred to in Article 24m(1)(2)(e) in conjunction with Article 24o of the CIT Act.

In the opinion of the Supreme Administrative Court, the Company exercised due diligence in applying the regulations in question and it was unreasonable (as argued by the tax authorities of both instances) to expect GWW’s client to perform other obligations which it could not objectively perform.

The Supreme Administrative Court generally supports the literal interpretation of the provisions, considering it to be correct. Nevertheless, as the representatives of GWW’s client rightly pointed out in the case in question, there are situations in which a thorough examination of the shareholder structure, especially in the case of listed companies or difficulties in identifying natural persons, is impossible or excessively difficult. In such exceptional circumstances, in order to ensure the fair and effective application of the law, it becomes necessary, as in the present case, to deviate from a strict literal interpretation in favour of a purposive interpretation. This allows the result intended by the legislator to be achieved.

Thus, the Supreme Administrative Court confirmed that what is crucial is the real scope of the taxpayer’s ability to act, and not the formal fulfilment of conditions which are objectively impossible to meet.

The case was handled for GWW’s client by GWW partner, tax advisor Mariusz Tkaczyk, tax advisor Artur Bubrowiecki and attorney Kamil Szczęsny.