Witholding tax – recent WSA judgement

Is the income received by foreign companies from Polish company realized on the Polish territory?


The question was answered recently by Polish Provincial Administrative Court WSA (I SA / Wr 1825/13 , judgment from 01.21.2014 ), which stated that the source of income located in Poland takes place  when such a source of income is permanently associated with the Polish territory , or when the source of income are Polish residents using goods or intangible assets belonging to other entities.
WSA accepted by this the position and legal arguments contained in the judgment of the Supreme Administrative Court dated 5 November 2009 (II FSK 2194 /08 ), which expressed the view that on the basis of Polish tax law, the limited tax liability of non-residents cannot be linked with obtaining revenue from Polish company , in situation when the provision of the services is not related to the territory of Poland.
This means that solely (only) payment of remuneration by the Polish entity is not a sufficient condition to recognize that the income of a foreign entity has been reached on Polish territory.