Poland (Amendment) Order, 2021

L.N. 64 of 2021

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief on Taxes on Income with the Republic of

Poland (Amendment) Order, 2021

IN EXERCISE of the powers conferred by article 76 of the

Income Tax Act, the Minister for Finance and Employment has made

the following order:-

The title of this order is the Double Taxation Relief on Citation.

Taxes on Income with the Republic of Poland (Amendment) Order,

2021 and this order shall be read and construed as one with the Double L.N. 28 of 1995.

Taxation Relief on Taxes on Income with the Republic of Poland

Order, hereinafter referred to as "the principal order" as amended by

the Double Taxation Relief (Taxes on Income) (Republic of Poland) L.N. 14 of 2012.

(Amendment) Order, 2012.

(Article 2)

PROTOCOL BETWEEN THE GOVERNMENT OF MALTA

AND THE GOVERNMENT OF THE REPUBLIC OF POLAND

AMENDING THE AGREEMENT BETWEEN THE GOVERNMENT OF

MALTA AND THE GOVERNMENT OF THE REPUBLIC OF POLAND

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON

INCOME, SIGNED AT VALLETTA ON THE 7TH DAY OF JANUARY

1994, AS AMENDED BY THE PROTOCOL SIGNED AT WARSAW ON

THE 6TH DAY OF APRIL 2011

The Government of Malta and the Government of the Republic of

Poland, desiring to conclude a Protocol to amend the Agreement between the

Government of Malta and the Government of the Republic of Poland for the

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with

Respect to Taxes on Income, signed at Valletta on the 7th day of January

1994 (hereinafter "the Agreement"), as amended by the Protocol signed at

Warsaw on the 6th day of April 2011 (hereinafter "the Amending Protocol"),

Have agreed as follows

ARTICLE I

Paragraph 3 of Article 10 "Dividends" of the Agreement shall be

deleted and replaced by the following

"3. The term "dividends" as used in this Article means income

from shares (including income from distributions on certificates or

participating units of an investment fund and their redemption, the

liquidation or partial liquidation of a company and income from the

purchase or redemption of own shares by a company) or other rights,

not being debt-claims, participating in profits, as well as income from

other rights which is subjected to the same taxation treatment as

income from shares by the laws of that State of which the company

making the distribution is a resident.".

ARTICLE II

Paragraph 2 of Article 11 "Interest" of the Agreement shall be deleted

and replaced by the following

"2. However, such interest may also be taxed in the

Contracting State in which it arises and according to the laws of that

State, but if the recipient is the beneficial owner of the interest the tax

so charged shall not exceed 4 per cent of the gross amount of the

interest.".

ARTICLE III

Article 12 "Royalties" of the Agreement, as amended by Article 10 of

the Amending Protocol, shall be deleted and replaced by the following

"Article 12

Royalties and payments for technical services

1. Royalties or payments for technical services arising in a

Contracting State and paid to a resident of the other Contracting State may be

taxed in that other State.

2. However, such royalties or payments for technical services may

also be taxed in the Contracting State in which they arise and according to the

laws of that State, but if the recipient is the beneficial owner of the royalties

or payments for technical services the tax so charged shall not exceed

(a)

five per cent (5%) of the gross amount of the royalties;

(b) five per cent (5%) of the gross amount of the payments for

technical services.

It is hereby declared

Amendments to

have effect.

(a) that the amendments to the principal order, as

specified in the Protocol set out in the Schedule to this order

(hereinafter referred to as "the Protocol"), have been made with

the Government of the Republic of Poland;

(b) that it is expedient that those amendments should

have effect following the entry into force of the Protocol and in

accordance with the relevant provisions of the Protocol;

(c) that the Protocol shall enter into force on such date as

may be announced by notice in the Gazette.

(a) The term "royalties" as used in this Article means

payments of any kind received as a consideration for the use of, or the right to

use, any copyright, patent, trade mark, design or model, plan, secret formula

or process, or for the use of, or the right to use any industrial, commercial or

scientific equipment or for information (know-how) concerning industrial,

commercial or scientific experience; the term shall also include payments of

any kind related to cinematograph films, and films or tapes for radio or

television broadcasting.

(b) The term "payments for technical services" as used in this

Article means any payment in consideration for any service of a

managerial or consultancy nature, unless the payment

(i)

is made to an employee of the person making the

payment;

(ii) is made for teaching in an educational institution or

for teaching by an educational institution;

(iii) is made by an individual for services for the

personal use of an individual;

(iv) is made for services related to immovable property

located in the Contracting State of which the person making the

payment is a resident, if such services resulted in a construction,

maintenance project, or a landscaping project or a similar

tangible project; or

(v) is accrued under the laws of a Contracting State to

the initial value of the machinery or industrial equipment of the

person making the payment or to the maintenance of such

machinery or industrial equipment.

The provisions of paragraphs 1 and 2 shall not apply if the

beneficial owner of the royalties or payments for technical services, being a

resident of a Contracting State, carries on business in the other Contracting

State in which the royalties or payments for technical services arise through a

permanent establishment situated therein and the right or property in respect

of which the royalties or payments for technical services are paid is

effectively connected with such permanent establishment. In such case the

provisions of Article 7 shall apply.

Royalties or payments for technical services shall be deemed to

arise in a Contracting State when the payer is that State itself, a political

subdivision, or a local authority or a resident of that State. Where, however,

the person paying the royalties or payments for technical services, whether he

is a resident of a Contracting State or not, has in a Contracting State a

permanent establishment in connection with which the liability to pay the

royalties or payments for technical services was incurred, and such royalties

or payments for technical services are borne by such permanent

establishment, then such royalties or payments for technical services shall be

deemed to arise in the State in which the permanent establishment is situated.

Where, by reason of a special relationship between the payer and

the beneficial owner or between both of them and some other person, the

amount of the royalties or payments for technical services, having regard to

the use, right or information for which they are paid, exceeds the amount

which would have been agreed upon by the payer and the beneficial owner in

the absence of such relationship, the provisions of this Article shall apply

only to the last-mentioned amount. In such case, the excess part of the

payments shall remain taxable according to the laws of each Contracting

State, due regard being had to the other provisions of this Agreement.".

ARTICLE IV

Paragraph 2 of Article 13 "Capital Gains" of the Agreement, as

amended by Article 11 of the Amending Protocol, shall be deleted and

replaced by the following

"2. Gains derived by a resident of a Contracting State from the

alienation of shares or comparable interests, such as interests in a

partnership or trust, or certificates or participating units of an

investment fund, may be taxed in the other Contracting State if, at any

time during the 365 days preceding the alienation, these shares or

comparable interests derived more than 50 per cent of their value

directly or indirectly from immovable property, as defined in Article 6,

situated in that other State.".

ARTICLE V

Article 16 "Directors’ fees" of the Agreement shall be deleted and

replaced by the following

"ARTICLE 16

Directors’ Fees

Directors’ fees and other similar payments derived by a resident

of a Contracting State in the capacity as a member of the board of

directors or of the supervisory board or of any other similar organ or a

company which is a resident of the other Contracting State shall be

taxed only in that first-mentioned State.".

ARTICLE VI

Paragraph 1 of Article 23 "Elimination of double taxation" of the

Agreement, as amended by paragraph 1 of Article 16 of the Amending

Protocol, shall be deleted and replaced by the following

"1.

In case of Poland, double taxation shall be avoided as

follows

(a) Where a resident of Poland derives income which

may be taxed in Malta in accordance with the provisions of this

Agreement (except to the extent that these provisions allow

taxation by Malta solely because the income is also income

derived by a resident of Malta), Poland shall allow as a deduction

from the tax on the income of that resident, an amount equal to

the income tax paid in Malta.

Such deduction shall not, however, exceed that part

of the income tax, as computed before the deduction is given,

which is attributable to the income which may be taxed in Malta;

(b) Where in accordance with any provision of this

Agreement income derived by a resident of Poland is exempt

from tax in Poland, Poland may nevertheless, in calculating the

amount of tax on the remaining income of such resident, take

into account the exempted income.".

ARTICLE VII

1. Paragraph 2 of Article 25 "Mutual Agreement procedure" of the

Agreement shall be deleted and replaced by the following

"2. The competent authority shall endeavour, if the objection

appears to it to be justified and if it is not itself able to arrive at a

satisfactory solution, to resolve the case by mutual agreement with the

competent authority of the other Contracting State, with a view to the

avoidance of taxation which is not in accordance with the Agreement.

Any agreement reached shall be implemented notwithstanding any

time limits in the domestic law of the Contracting States.".

2. In Article 25 "Mutual Agreement procedure" of the Agreement

the following new paragraph shall be added after paragraph 4

"5.

Where,

(a) under paragraph 1, a person has presented a

case to the competent authority of a Contracting State on

the basis that the actions of one or both of the Contracting

States have resulted for that person in taxation not in

accordance with the provisions of this Agreement, and

(b) the competent authorities are unable to reach an

agreement to resolve that case pursuant to paragraph 2

within three years from the presentation of the case to the

competent authority of the other Contracting State,

any unresolved issues arising from the case shall be

submitted to arbitration if the person so requests in writing.

These unresolved issues shall not, however, be submitted to

arbitration if a decision on these issues has already been

rendered by a court or administrative tribunal of either

State. Unless a person directly affected by the case does not

accept the mutual agreement that implements the

arbitration decision, that decision shall be binding on both

Contracting States and shall be implemented

notwithstanding any time limits in the domestic laws of

these States. The competent authorities of the Contracting

States shall by mutual agreement settle the mode of

application of this paragraph.

For the purposes of sub-paragraph (b), the competent

authorities of the Contracting States may agree to resolve

the case within two years.".

ARTICLE VIII

In Article 26 "Exchange of Information" of the Agreement, as

amended by Article 17 of the Amending Protocol, the following

sentence shall be added at the end of paragraph 2

"Notwithstanding the foregoing, information received by a

Contracting State may be used for other purposes when such

information may be used for such other purposes under the laws

of both States and the competent authority of the supplying State

authorizes such use.".

ARTICLE IX

The following Article 26A shall be added after Article 26

"ARTICLE 26A

Prevention of Treaty Abuse

Notwithstanding any provisions of this Agreement, a

benefit under this Agreement shall not be granted in respect of an

item of income if it is reasonable to conclude, having regard to

all relevant facts and circumstances, that obtaining that benefit

was one of the principal purposes of any arrangement or

transaction that resulted directly or indirectly in that benefit,

unless it is established that granting that benefit in these

circumstances would be in accordance with the object and

purposes of the relevant provisions of this Agreement.".

ARTICLE X

1. Each of the Contracting States shall notify in writing

through diplomatic channels to the other the completion of the

procedures required by its law for the bringing into force of this

Protocol.

2. This Protocol shall enter into force on the thirtieth day after

the receipt of the later of the notifications referred to in paragraph 1

and shall thereupon have effect

(a) in respect of taxes withheld at source, to income

derived on or after the first day of January of the year next

following the date on which the Protocol enters into force;

(b) in respect of other taxes on income, for taxes

chargeable for any tax year beginning on or after the first day of

January of the year next following the date on which the Protocol

enters into force.

3. This Protocol shall remain in force as long as the

Agreement and the Amending Protocol shall be in force, unless the

Protocol is terminated by one of the Contracting States. In such case,

the Protocol shall cease to have effect at the end of the calendar year in

which the other Contracting State receives the notice of termination.

Such note should be delivered at least three months before the end of

the calendar year.

Done in duplicate at Warsaw this 30 day of November 2020 in

the English and Polish languages, each text being equally authentic.

For the Government of the

For the Government of Malta

Republic of Poland

John Paul Grech

Jan Sarnowski

€0.72