Polish withholding tax on software and SaaS: why an end-user licence is not the whole answer

A payment from Poland for software or SaaS is not automatically a royalty, but calling the contract an end-user subscription does not settle every withholding tax question. The analysis must cover copyright rights, access to equipment or infrastructure, any separately supplied services and the applicable tax treaty. Polish individual rulings show both favourable outcomes and a materially adverse approach to cloud infrastructure.

Legal position as at 1 November 2026

Which part of the Polish WHT rules is relevant?

Article 21(1)(1) of the Corporate Income Tax Act, or CIT Act, covers specified income including copyright rights, know-how and use of industrial, commercial or scientific equipment. Article 21(1)(2a) covers listed services, including advisory, management and data processing services, and services of a similar nature. The domestic rate for the relevant categories is generally 20%, subject to the applicable treaty and other relief.

These are separate classification questions. A payment can fall outside copyright royalties yet require an equipment-use analysis. Equally, an application helping the customer's employees manage data is not necessarily a service in which the supplier itself provides management or data processing. What each party actually undertakes is central.

Article 21(2) requires treaties to be taken into account. Treaty definitions and business-profits provisions differ, so an assessment for a US supplier should not be copied unchanged to a supplier resident elsewhere. Where a treaty benefit is needed, the Polish payer must address the residence certificate and due diligence under Article 26(1).

What rights does the customer actually acquire?

Start with the signed contract, product terms, order form and technical description. Identify whether the customer can only use the software's functions for its own business or can reproduce, adapt, distribute, sublicense or otherwise commercially exploit protected rights. Rights granted to affiliates should also be identified: a group-wide arrangement may differ from an individual employee's access.

Do not treat the absence of source-code access as the only test. Copyright rights can be commercially exploited without a transfer of source code. Conversely, technical copying necessary for permitted use is not necessarily equivalent to acquiring commercial exploitation rights. The relevant domestic provisions, treaty wording and precise permissions must be read together.

The invoice should also be compared with what was purchased. A single “IT services” line might conceal software access, dedicated infrastructure, implementation and a separate support service. An artificial allocation is not a solution, but a genuine distinction between deliverables can be important.

What did KIS accept for ordinary end-user software?

In the individual ruling of 21 November 2024, 0111-KDIB1-2.4010.533.2024.2.EJ, a Polish company acquired software from a German supplier for everyday internal activities. The description included cloud subscriptions and hosted software. The company did not acquire rights to resell, distribute, sublicense or modify the software, and the arrangements did not transfer rights to the supplier's infrastructure.

The question concerned the copyright-related category in Article 21(1)(1). KIS accepted the applicant's position that the described end-user payments did not trigger withholding on that basis. Importantly, the authority expressly waived a separate legal justification. The detailed reasoning set out earlier in the document therefore belongs to the applicant, even though its position was accepted.

The useful conclusion is narrow: a properly described internal-use arrangement can fall outside the relevant copyright category. The ruling is not a general clearance for every product sold as SaaS, every additional service or every infrastructure feature. Its factual limits matter when comparing a new contract.

Why did a 2026 SaaS ruling reach an adverse result?

The ruling of 7 May 2026, 0114-KDIP2-1.4010.91.2026.2.PP, concerned access to a financial-process application supplied from Cyprus. The applicant described a standard SaaS platform, no transfer of copyright and no rental, lease or transfer of rights to the supplier's infrastructure. It argued that it bought software functionality rather than equipment or a separate data-processing service.

KIS nevertheless focused on the ability to transmit and store data and generate reports within the supplier's environment. It treated the infrastructure use as falling within the equipment category in Article 21(1)(1), despite the applicant's description that separate disk space was not supplied. The authority therefore rejected the asserted absence of WHT obligations.

This distinction has a practical consequence for procurement teams. A clause saying “no copyright is transferred” addresses only one potential basis. The assessment also needs a truthful technical explanation of storage, resource allocation, control, permitted access and what the supplier provides. The ruling's broad infrastructure approach remains an authority position in that individual case; it should not be presented as a court judgment declaring all SaaS taxable.

Does access to an AI model change the assessment?

In the ruling of 12 June 2026, 0114-KDIP2-1.4010.138.2026.1.MW, a Polish business subscribed to an AI service from a US provider through a browser and API. The facts included no copyright exploitation rights, no source-code access, no physical or logical access to servers and no control over resource allocation. The subscription was a fixed periodic payment.

KIS accepted that the described payments did not create the asserted WHT obligation. Its reasoning addressed both the relevant rights and equipment issues and the listed-service category. The service's actual purpose and scope were different from the services listed in Article 21(1)(2a).

The contrast with the May ruling does not establish a universal distinction between “AI” and “ordinary software”. It demonstrates how the contractual and technical description, as well as the relevant treaty, can affect the answer. A customer changing from simple access to dedicated infrastructure or acquiring redistribution rights should revisit the assessment rather than relying on the product's original label.

How should finance and IT prepare a defensible classification?

Finance needs information that product brochures rarely provide. The following points should be established together with procurement and IT:

• the legal supplier and any reseller's actual role, including who is entitled to the payment;
• the permitted copyright use and any rights granted to affiliates or external customers;
• whether storage or computing capacity is separately allocated and what control the customer has;
• what processing the supplier performs, as distinct from operations performed by the customer's own staff;
• separate implementation, advisory, support or management obligations;
• the supplier's tax residence, applicable treaty and any Polish permanent-establishment connection.

A Polish reseller should not be treated as a transparent conduit merely because the software producer is foreign. Conversely, the reseller's legal position should not be assumed from the address on an invoice. The contract and payment entitlement require their own review.

Does the PLN 2 million threshold apply to all software services?

No. Article 26(2e) concerns specified payments, including those classified under Article 21(1)(1), to related foreign taxpayers, on the conditions set out there. It does not bring all advisory or data-processing fees into pay and refund simply because the annual amount exceeds PLN 2 million. Due diligence and ordinary withholding rules may still apply outside that mechanism.

There is also a specific regulatory exclusion from Article 26(2e) for certain equipment-use payments, subject to the requirements in section 2 of the regulation of 28 December 2022. Exclusion from the special collection mechanism is not the same as exclusion from substantive WHT. The published October 2026 extension of a different temporary exception must not be described as a general suspension for software.

Our contract scenario: one group company buys seats for internal use; another obtains a right to distribute the same application to customers; a third separately rents identified computing capacity. The product family is the same, but the legal rights and services differ. A single group policy based only on “software subscription” can therefore miss the relevant distinction. No tax saving is assumed in this scenario.

What should happen before the next payment?

Build a short classification file that maps each charge to the underlying contract and technical functions, records the legal and treaty basis and identifies who approved any preference. Escalate differences between the contract and actual usage, especially sublicensing and infrastructure access. Where uncertainty is material, a ruling request should describe the real arrangement in sufficient detail rather than relying on a product name.

Jarosław Włoch and Aleksandra Nocuń-Galas support WHT analysis and cross-border group payments. Our guide to documents before paying abroad explains the wider payment file; the software assessment should be completed before that file is used to authorise payment.