Polish entrepreneurs, who use foreign price comparison engines may encounter problems. The Director of the National Tax Chamber in interpretation from 9 of May, 2018 (no. 0114-KDIP2-1.4010.58.2018.2.AJ) affirmed that on payment of remuneration for the benefit of the foreign entrepreneur for the use of on-line price comparison engines, 20% of witholding tax ought to be deducted in Poland from legal persons if Polish taxpayer does not hold a valid certificate of residence of foreign entrepreneur.

Interpretation applied to price comparison engines, which search by request the most profitable offers of selected goods or services with related customers’ opinions. Entrepreneur explained that he placed his product in a foreign price comparison engine database and has paid it for the result as per the contract, that is each click of interested customer. In interpreneur’s view, he was not obliged to to deduct 20% of witholding tax in Poland as these are not advertising services at all or services of “similar nature”, which are taxed based on Art. 21 Par. 1 pt. 2a of the Corporate Income Tax Act.

According to the Director of National Tax Chamber, use of price comparison engines presents the component of on-line marketing is not different from multimedia advertisements, on-line advertisements or a mass of sent advertising e-mails. Thereby, entrepreneur must deduct 20% of remuneration paid out abroad.

It is worth noticing that Polish entrepreneurs are obliged to deduct witholding tax from remunerations paid out for the benefit of foreign entities in virtue of: advisory, accounting services, services of market research, legal, advertising services, services of management and supervision, of data processing, of employees’ recruitment and staff acquisition, of guarantee and sureties and services of similar nature. Regulations on collection of this tax are applied however with reference to agreements on prevention of doubled taxation, to which Poland is the party. If the agreement on avoidance of doubled taxation stipulates lower tax rate or tax exemption, provisions of this agreement are applicable on condition that Polish taxpayer holds a valid certificate of residence issued for the foreign entity. Certificate of residence confirms the place of taxpayer’s domicile for tax-related purposes.