Tax residency certificates in times of COVID-19

On 24th June this year provisions aimed to ease the requirements for residence certificates in the withholding tax (WHT) during the coronavirus threat came into force.

Art. 31ya, added to the so-called Shield 1.0. by the so-called Shield 4.0. provides for the following simplifications (they apply to both CIT and PIT):

1. In a case of a tax residency certificate that does not have a validity period, if a period of twelve months for the purpose of withholding tax expires during the period of the epidemic emergency status or the epidemic status announced in connection with COVID-19, a tax remitter may use this certificate for the duration of these states and for a period of 2 months after their cancellation;
2. During the epidemic emergency status and the epidemic status announced in connection with COVID-19, as well as within the next 2 months after their cancellation, a tax remitter may use copies of tax residence certificates, if information resulting from a submitted copy of such a certificate does not raise justified doubts as to its compliance with facts;
3. During the period of epidemic emergency status and the epidemic status announced in connection with COVID-19, as well as during the next 2 months after their cancellation, a tax remitter may use tax residence certificates, which relate to 2019, if it additionally receives a taxpayer’s statement that data contained therein is up-to-date.

With respect to above, the law does not provide for any transitional regulations, which formally means that it is not possible to apply simplified requirements in the period before June 24 this year (although the COVID-19 epidemic have been in effect since March this year). In practice, there may also be other problems associated with the application of relaxed regulations.

The above rules are part of the so-called Shield 4.0., i.e. the Act of 19 June 2020 on interest subsidies for bank loans granted to entrepreneurs affected by the effects of COVID-19 and on simplified proceedings for the approval of the arrangement in connection with the occurrence of COVID-19 (Journal of Laws of 2020, item 1086), which introduced art. 31ya to the so-called Shield 1.0., i.e. the Act of March 2, 2020 on special solutions related to the prevention, counteracting and eradication of COVID-19, other infectious diseases and crisis situations caused by them (Journal of Laws of 2020, item 374, 567, 568, 695 and 875).