Royalties are all the receivables arising from the direct use or right to use works like literature, art, journalistic articles etc. They arise not only from license agreements but also from franchise agreements or royalties of authors and creators. What’s important, these receivables are subject to taxation.
Taxation of royalties usually relates to the use of the abovementioned works. Such tax, if there is no avoidance of double taxation agreement signed by Poland and another country, amounts to 20% of the royalty value. In case there is a binding avoidance of double taxation agreement, the tax rate is stipulated by this agreement.
Usually, the tax rate provided in such agreements fluctuates between 5-10%. The taxation of royalties may take place in Poland, on condition that it does not exceed the rates provided in an international agreement (since international law has primacy over the national statutory law). Interestingly enough, there are countries with which Poland had concluded an avoidance of double taxation agreement, and these agreements determine the tax rate at 0 %. Switzerland is an example of such country.
Our law firm provides consulting concerning taxation of royalties. We support our clients in interpreting both the national and international regulations and also in carrying out the entire procedure of paying this tax.
Feel free to contact us, if you are interested in learning more details.