New favorable decision from CJEU for investors regarding Polish withholding tax

New favorable decision from CJEU for investors regarding Polish withholding tax

On June 8, 2023, the CJEU issued a judgment (case C-322/22) concerning third-country (non-EU/EEA) funds investing in Poland. This time CJEU questioned Polish provisions providing for limitations and exclusions of interest on tax withheld in breach of EU law.

Since April 10, 2014 (CJEU judgment in the case C-190/12, which gave basis for third country funds to recover WHT in Poland), the Polish legislator has not taken any actions to amend domestic rules which have been found in breach of EU law. Consequently, to this day the C-190/12 judgment provides the most relevant legal basis for foreign funds to seek reimbursement of taxes suffered in Poland. 

Discrimination against funds from third countries has been continuously taking place in Poland for many years as a result of failure to amend Polish regulations after the case C-190/12.

The refund process is usually very lengthy, time-consuming and requires significant costs to be borne by foreign investment funds (local lawyers’ fees, translations, strict follow-up with tax authorities). Moreover, such funds have been effectively deprived in Poland of the right to receive interest award due on such overpayments – an issue that has been the subject matter of the CJEU proceedings which ended with the judgment of June 8, 2023.

In this judgment, the CJEU not only questioned the general domestic 30-days deadline (counted from the date of publication of the CJEU judgment constituting the basis for claiming the refund) for submission of the overpayment claim required in order to be entitled to the full interest award, but also the approach of Polish administrative courts. According to the latter the aforementioned rule should be interpreted and applied in other cases (which have been finalized after the relevant CJEU judgment publication date) with the effect of creating a separate deadline for submission ending 30-days from the day the tax has been withheld.

The CJEU noted that in light of the national legislation and practice, in such a short period a taxpayer may not even be aware of the fact that the tax has in fact been withheld.   

As a result of the above, the CJEU has effectively opened the door for foreign funds to seek compensation due from Poland in connection with taxes which such funds have been deprived off in breach of EU law.  This new opportunity should apply both to future reclaims as well as those effectively closed (ended with final decisions / judgments).  In the latter case, the taxpayers will now have a possibility to reopen such closed cases within relatively short statutory deadlines. Potential consequences of this judgment may be broader, affecting among other cases involving other types of entities (EU/EEA investment funds).

Globe Refund has a strong track record with Polish WHT refunds. We don’t apply any fixed costs and there is no workload for the Asset Manager. Do not hesitate to contact us for a free assessment of the reclaim opportunities.

Link to the full judgement here below :;jsessionid=6BAD743C940A1E26ABFBE8B7BB0D11F8?text=&docid=274424&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=23959312