US and Poland Sign New Tax Treaty
On February 14, 2013, the U.S. Department of the Treasury announced that Ambassador Stephen Mull and Polish Deputy Finance Minister Maciej Grabowski signed a new income tax treaty between the United States and Poland.
The new tax treaty replaces the existing agreement, signed in 1974, and brings the bilateral relationship into closer conformity with current U.S. tax treaty policy. Significantly, the new treaty contains a comprehensive limitation on benefits provision that is consistent with many recently concluded U.S. tax treaties, and that is intended to ensure that only residents of the United States and Poland will enjoy the benefits of the treaty.
The new treaty provides for reductions in withholding taxes on cross-border payments of dividends, interest and royalties. The new treaty also incorporates new methods for attributing business profits to a permanent establishment. The new methods were recently developed by the Organization for Economic Cooperation and Development (OECD) and are consistent with U.S. tax treaty policy.
Consistent with U.S. tax treaty policy and the international standard for tax information exchange, the new treaty provides for the full exchange of information between the competent authorities to facilitate the administration of each country’s tax laws. It will enter into force once ratified by each country.
The text of the treaty is available from the US Department of the Treasury.