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UK-Poland Double Taxation Treaty

UK-Poland Double Taxation Treaty

A double taxation convention

The double tax treaty between Poland and the United Kingdom was signed in London on 20 July 2006. The convention was concluded with the purpose of avoiding double taxation and to prevent fiscal evasion for taxes on income and capital gains.

The treaty applies to individuals who are residents of one or both countries. It is also applicable for legal entities boing business in both of the countries. Our Polish law firm can give you details about how the treaty applies to specific business structures, like branches or subsidiaries in Poland.

Taxes covered by the double taxation treaty

The double taxation treaty between Poland and UK applies on taxes on income and capital gains. For the United Kingdom, examples of such taxes are: the income tax, the corporate tax and the capital gains tax. The Polish taxes for which the treaty applies are the personal income tax and the corporate income tax. The two countries are bound by this treaty to announce one another if any significant changes take place in their taxation laws.

For the purpose of the double tax treaty, a “person” is an individual, company or any other body or persons, but not a partnership. A “company” is defined as a legal entity that is treated as such for corporate tax purposes.

Double tax avoidance in Poland and the UK

The double taxation treaty sets forth the conditions under which double taxation is eliminated in the two countries. According to the law of the United Kingdom, a tax payable in a territory outside the United Kingdom is allowed as a credit against United Kingdom tax. Double taxation is avoided in Poland when a Polish resident derives income that is taxed in the UK under the provisions of the convention and thus becomes exempt from a second taxation in Poland.

The double taxation treaty contains provisions for the taxation of income from immovable property, such as a property in Poland or income from agriculture or forestry, business profits, dividends, royalties, interest, capital gains, income from employment, pensions and director’s fees. Special provisions also apply for students, professors, teachers or researchers.

For detailed information about taxation in Poland, you can contact our Polish law firm.