Protocol to the Tax Treaty between Malta and Poland Signed in order to be line with BEPS

  • By:Melissa Speigner

On the 1st of December 2020, Poland and Malta have signed a protocol amending the 1994 income tax treaty. According to the Polish Ministry of Finance, the protocol provides for the implementation of the minimum BEPS standards and, in particular, includes amendments providing for

  • Withholding tax on fees for technical services;
  • Specifically, changes to the taxation of directorship services and other remuneration derived by Polish residents in terms of Article 16 of the treaty. Such fees and or remuneration shall no longer be exempt, but a credit will be given for any tax suffered in Malta on such fees/ remuneration.;
  • A new method of avoiding double taxation in general using the credit method; and
  • Changes in the taxation of disposal of real estate companies.

This is the second similar protocol to be put forward by Poland with other EU member Countries. The First was signed with The Netherlands. In both Malta’s and Netherlands’ case, the Polish Ministry of Finance said these protocols were necessary because neither contracting state had introduced such changes with Poland when discussing the introduction and implementation of the MLI Convention with each other.

As to when this protocol will enter into force, further details will be published once available.

Posted in: International Taxation