As of 1 January 2022, the repeatedly deferred regulations relating to the so-called pay and refund mechanism in the scope of withholding tax came into force
Under the new WHT rules, in the case of certain payments (e.g. dividends) exceeding a certain value specified in the CIT Act, payers will not be able to apply the WHT preference (in particular the WHT exemption or lower rates stated in double tax treaties) automatically, but they will be obliged to withhold tax at source and then apply for its refund.
At the same time, there are possibilities to avoid the pay and refund mechanism on the basis of the tools provided for in the regulations, i.e. an opinion on the application of the preference or a statement on the fulfillment of conditions for the application of the exemption.
Together with our team we are already preparing WHT procedures for our Clients and updating existing WHT procedures in companies to adjust them to:
Our work in preparing the WHT procedure consists in:
Developing processes and procedures regarding the verification of transactions made by the company for withholding tax purposes
Developing a process for dealing with transactions being subject to WHT by a company in order to determine the correct withholding tax treatment
Designation of persons responsible for the identification of transactions being subject to WHT and division of competences within the organisation
Review of transactions performed by the company in terms of WHT
We also provide support in preparing a request for an opinion on the application of WHT preferences
We commence our work only upon the Client’s acceptance of our cooperation terms and conditions, which we define as a lump sum – even if our actual engagement exceeds the original estimate, the Client is charged only a fixed amount resulting from the previous arrangements.
We would be happy to arrange a telephone or video call with you to discuss the scope of the WHT procedure best suited your needs. Please do not hesitate to contact our tax advisors:
