Source: https://www.bankmillennium.pl/about-the-bank/about-the-bank/crs
Timestamp: 2019-04-18 20:44:40+00:00

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CRS (Common Reporting Standard) is modeled upon FATCA a standard of international tax information exchange developed by OECD as adopted by ca. 100 countries worldwide including Poland and other European Union member states. CRS was implemented into the Polish legal system by the Act of 9 March 2017 on exchange of tax information with other countries (the CRS Act) with effect from 1 May 2017.
The CRS Act imposed, upon financial institutions (including, inter alia, banks, brokerage houses, investment funds), duties connected with identification of tax residence of their clients (both consumers and entrepreneurs) and accounts, maintained in their favour, subject to reporting duty to tax authorities (due diligence procedures and reporting duties).
Gather documentation linked with the above process including, primarily, as follows: declarations of tax residence of account holders and controlling persons, official documents delivered (including, inter alia, tax residence certificates, identification documents and business entity registration documents).
Account holders and in case of certain entities also persons controlling them who are beneficial owners relative to such entities have the duty to submit tax residence declarations and present financial institutions with documents referred to in the CRS Act when, inter alia, opening current accounts, term deposits, securities accounts.
Account holders have the duty to inform financial institution on any change of circumstances having impact upon his/her tax residence (e.g. change of domicile address, country) within 30 days from such change and submit, to the financial institution, declaration updated accordingly within 30 days from such change.
It is necessary to underscore that according to the CRS Act, financial institutions in Poland (including Bank Millennium S.A.) have the duty to deliver, to the tax authorities, client account information in case they are not able to identify country of tax residence (the so-called not documented accounts).
Country of controlling persons/beneficiary owners (other than Poland and the U.S.).
Meeting requirements of tax residence in countries other than Poland and the U.S. will cause the account to be deemed to be a reported account to tax authorities in CRS-1 Information.
Account balance or value and in case of monetary insurance agreement or annuity agreement – monetary value of repurchase value established as at the end of calendar year, for which information is delivered, or information on closing of an account within the calendar year, for which information is delivered.
Total gross amount of sales revenue or redemption of financial assets paid in or credited on the account in a calendar year, relative to which reporting financial institution performed a function of a trustee, broker, proxy or other representative acting to the account of the account holder.
The CRS Act provides for a specific institutional client classification scheme (i.e. business entities, except for sole traders). Conditional upon determined classification accounts held by clients will be or will not be subject to reporting.
relevant regulation of a country or its incorporation documents require that in case of such entity’s liquidation or dissolution assets will be transferred to Government entity or public utility organization or will be assigned to the Government.
Income from disposal and exercise of rights under financial instruments.
entity affiliated with stock exchange listed entity.
Passive NFE - means any non-financial entity which is not an Active NFE.
Passive NFE - investing entity which is not a financial intitution from a participating state - means an entity which is an investing entity and not a financial institution from participating state whose gross income originate, primarily, from investments or re-investments of financial assets and from trading in such assets, provided that it is managed by another entity who is a financial institution i.e. deposit, custodial institution, insurance firm or investing entity.
insurance firm (domestic insurance firm or foreign insurance firm in the meaning of the Act of 11.09.2015 on insurance and re-insurance activities, concluding monetary insurance agreements or annuity (pension) agreement or is obliged to make payments under such agreements).
Is income from foreign investment funds subject to taxation in Poland and does the Client (individuals) have to perform any related tax obligations?
Income from foreign investment funds in Poland is subject to self-taxation by investor (individual resident) by lump-sum personal income tax at the rate of 19% – legal basis: art. 30a sec. 1 pt. 5 in connection with art. 5a pt. 14 of the Act of 26 July 1991 on personal income tax (PIT Act).
Income (taxation base) and due tax are calculated in PLN. Income is defined as revenue surplus (in the form of the amount of repurchase/sale gained) less cost of revenue (amount of purchase plus fees and charges paid). Revenues/costs in FX are converted into PLN a tan average NBP (National Bank of Poland) FX rate of the last business day preceding the day of revenue generation/cost payment. In consequence – due to FX risk connected with different rates applied to calculation of revenue and costs – taxable income may significantly deviate from the amount of investment earnings in the meaning of increase in value of participation units/title in a given fund conditional upon whether PLN appreciated or depreciated between the day the cost was incurred and the day the revenue was generated.
Investor-resident, as taxpayer has the right – at his/her own discretion – to declare calculated tax in one of the four available declarations: PIT-36, PIT-38, PIT-39 and if he/she operates a business subject to flat rate taxation at the rate of 19% - also in PIT-36L.
It is also necessary to remember that in accordance with art. 30a sec. 5 PIT Act losses generated from funds cannot be netted off against gain from other funds generated throughout the entire tax year, nor against other types of capital gains such as interest, dividend or income from sale of shares/equities.
Is income from domestic investment funds subject to taxation in Poland and does Client (investor, who is a natural person/individual) has any tax duties connected with such income?
Income from domestic investment funds is subject to taxation with lump sum personal income tax – legal basis: art. 30a sec. 1 pt. 5 in connection with art. 5a pt. 14 of the Act of 26 July 1991 on personal income tax (PIT Act). It’s a withholding tax paid by the investment fund, who assesses and pays due tax to the tax office (in case of investment certificates withholding tax may be paid by brokerage house maintaining securities account on which certificates are registered). Investor, who is a natural person domiciled in Poland has no reporting duties relative to tax authorities with respect to such taxation. Investors domiciled (having registered head offices) in a country other than Poland may have the duty to settle their incomes from investments in the country of their residence (head office location) and should consult taxation rules and obligations with a local legal or tax advisor.
Is the conversion of participation units in one sub-fund (e.g. equities fund) into units in another sub-fund (e.g. bonds or mixed) within the same fund subject to taxation?
Such conversion is not subject to taxation if it occurs between sub-funds within the same fund (legal basis: art. 17 sec. 1c of the PIT Act). However, if sub-funds belong to two different funds – such “conversion” (income) is subject to taxation by lump-sum personal income tax at the rate of 19%.
According to provisions of art. 17 sec. 1c of the PIT Act, the principle applies to conversion executed under provisions of the Act of 27 May 2004 on investment funds and alternative investment fund management. In accordance with art. 162 sec. 3 of the said Act, the conversion (exchange) involves simultaneous redemption of participation units in an investment fund sub-fund with separate sub-funds and purchase, for cash obtained from such redemption, of participation units in another sub-fund of such investment fund. Provisions of art. 17 sec. 1c of the PIT Act may apply to conversion of foreign funds from other European Union member states (including e.g. Luxemburg), if the conversion is executed in a way similar to that provided for in the Act of 27 May 2004 on investment funds and alternative investment fund management.
Is interest accrued on structured (investment) deposits and banking securities subject to withholding tax paid by the Bank or does Client who is a Polish tax resident ha sany tax duties relative to such interest?
Interest accrued against investment deposits and banking securities is subject to Belka tax accrued by the Bank as tax remitter at the rate of 19% under similar principles as applying to interest accrued against regular term deposits. The Bank pays due tax to the account of tax office thereby closing the settlement of such income of a client who is Polish tax resident (Client who is Polish tax resident has no reporting duties relative to tax authorities). If banking securities are registered on brokerage account the withholding tax remitter function is performer by brokerage house or a custodial bank maintaining such account.
Are gains from investment in ‘World’ or ‘Wygodny Portfel’ Investment Programmes (life insurance with insurance capital funds) subject to taxation and does a policy holder (natural person domiciled, for tax purposes, in Poland) have any relevant taxation duties?
Yes, such gain constitutes „income from insurance premium investment”, referred to in art. 24 sec. 15 of the Act on personal income tax. Income is defined as the difference between benefit disbursed and the sum of premiums paid in to the insurance firm and transferred to capital fund. The said income is subject to lump-sum personal income tax at the rate of 19%. The tax is remitted by the insurance firm, who is responsible for accruing and remitting due tax to relevant tax office. Policy holder, who is a Polish tax resident has no reporting duties relative to tax authorities (as in the case of Belka tax collected on saving products such as saving accounts and deposits).
Is all interest accruing against Bank saving products subject to taxation by the so-called Belka tax (lump-sum personal income tax at 19%)?
Not all. In principle, interest gained by Clients who are natural persons on saving accounts and term deposits is subject to lump-sum personal income tax at the rate of 19% (except for non-residents who submit to the Bank a tax residence certificate – thus, such non-residents can take advantage of reduced tax rate under double taxation treaties concluded by Poland with countries of tax residence). Tax exemption, irrespective to tax residence of a Client, applies to IKE (individual retirement accounts) – legal basis: art. 21 sec. 1 pt. 58a of the Act of 26 July 1991 on personal income tax (the PIT Act). It is necessary to remember that in case of agreement termination and refund of accumulated funds, interest is subject to the lump-sum personal income tax at 19%. In addition, if more than one IKE is used for saving purposes, interest accruing on such IKE is subject to taxation at 75% (legal basis: art. 30 sec. 1 pt. 7a of the PIT Act).
Is opening of saving account or saving and settlement account (ROR) notified by the Bank to tax authorities?
It fact is not notified directly. According to art. 119zp § 1 pt. 3 of the Act – the Tax Law, banks and SKOK provide information, daily, to the clearing house (KIR S.A.), on opened saving accounts and RORs. Subsequently, in accordance with art. 119zq of the said Act, the clearing house delivers, daily, information on the total amounts credited and debited on accounts of qualified entities (in the meaning of art. 119zg pt. 4 of the Tax Law) regarding transactions crediting or debiting saving accounts and RORs.
Does the Bank disclose bank account balances and accumulated interest on accounts to tax authorities?
Yes. In case of Clients having reported accounts in the meaning of FATCA (link: https://www.bankmillennium.pl/o-banku/o-banku/fatca) and CRS account balance data and data on interest paid by the Bank is reported to the Head of the National Tax Administration annually by 30 June of the next year.
Data on interest gained by non-resident Clients is also reported by banks within IFT-1R information delivered under art. 42 sec. 2 of the Act of 26 July 1991 on personal income tax.
Furthermore, Bank has the duty to provide access to data on transactions and balances of Client bank accounts upon written demand from the Head of Tax Office or Director of Tax Administration Chamber under art. 182-183 of the Tax Law.
Are inflows from foreign benefits and pensions to personal accounts subject to taxation (mandatory contribution collection) by the Bank?
- duty to pay contribution to mandatory health insurance at 9% (legal basis: art. 85 sec. 9 in connection with art. 79 of the Act of 27 August 2004 on health care benefits financed from public funds). The Bank performs a remitter function i.e. deducts and remits tax/contribution to the Tax Office/Social Insurance Institution (ZUS).
Exceptions. Advances to PIT are withheld taking account of provisions of international double taxation treaties concluded by Poland and country of benefit and pension origin. These treaties provide for different taxation principles (only in the country of benefit origin or only in the country of receiver’s residence), including with respect to benefit title. Furthermore, provisions of Polish tax laws stipulate various taxation rules applicable to different categories of benefits (e.g. war annuity or retirement pension from the so-called III pillar insurance). Depending upon country of origin or type of benefit they might not be subject to payment of advances to PIT.
In order to ensure due performance by the bank of tax remitter function in case of opening a personal account the advisor would ask you whether inflows to the account would also include foreign benefits (pensions) and in case positive response is given we collect a special declaration from Clients for purpose of calculation of monthly advances to income tax and contributions to mandatory health insurance. In addition, according to § 31 sec. 20 of the General Rules Governing Provision of Banking Services to Natural Persons in Bank Millennium S.A. the Bank requires account holders to notify the bank, in writing, on inflows that might be expected to occur and to submit, upon the bank’s demand, documents confirming nature of benefits. Notification should be submitted forthwith upon receipt of the first inflow of such benefit to the account. Transfers of foreign benefits or pension have no universal, globally adopted codes for banks to be able independently – i.e. without Client involvement – clearly establish whether a given inflow is definitely a benefit or a retirement pension subject to taxation (contribution payment).
After the end of year, the Bank issues PIT-11 information with regard to revenues generated by the Client, deducted advances and contributions to health insurance subject to tax deduction. PIT-11 is sent out to Clients and their relevant tax offices by end of February for the previous year (since 2019 PIT-11 shall be sent to Tax Authorities by the end of January).
In case of benefits and pensions from EU/EFTA countries, according to art. 75 sec. 1a-1b of the Act of 27 August 2004 on health care benefits finances from public funds, the Bank submits enquiry to voivodship branch of NFZ (National Health Fund) relevant for the Client relative to the Polish benefits or pension received by the Client, subject to health insurance. If positive response is provided by NFZ, the bank has the duty to withhold a 9% contribution against the next inflows and notify such Client for health insurance coverage. If response is negative, the Bank will not withhold contributions to health insurance. In case of benefits and pensions from outside of the EU/EFTA countries, the Bank will withhold 9% contribution to health insurance without the obligation to submit the said enquiries to NFZ.
Does the Bank withhold advances or health insurance contributions from benefits and pension cheques?
According to individual interpretations provided by tax administration bodies and the NFZ, banks do not perform a function of personal tax advance remitters and remitters of contributions to the mandatory health insurance in case of benefit and pension cheques. Relevant revenues are reported by Clients (taxpayers) in annual tax returns and are subject to self-taxation.
Can the Bank, upon Client’s request, discontinue collecting advances to the Personal Income Tax, if a Client declares to assess and pay such advance independently?
No, it is not possible. Under the Polish tax laws there is no option to release tax remitter from duties imposed, by virtue of the law, upon taxpayer.
What should I do, if I believe that the Bank has been collecting advances and health insurance contributions against foreign pensions improperly?
In the first place, we recommend submission of a complaint which will be considered for its substantive merits by specialist tax advisors.
In case of mandatory health insurance contributions Client, as the insured has the right to submit, to relevant Director of the Voivodship Branch of NFZ, application for consideration of case regarding coverage by health insurance under art. 109 of the Act of 27 August 2004 on health care benefits financed from public funds.
Additional information is available also through info-line of the National Tax Administration or the National Health Fund (NFZ)/ZUS or in the local Tax Office or NFZ/ZUS Branch.
Can advances to the Personal Income Tax collected by the Bank against foreign pensions (retirement pensions and other benefits) be reduced on the basis of declarations referred to in art. 32 sec. 1a pt. 1-2 of the Act of 26 July 1991 on personal income tax (form PIT-2A) as it is done by employers when disbursing compensation for work performed?
Yes. If a foreign benefit or retirement pension is the only income of the Client, the Client will have the right to submit the form PIT-2A to the Bank and on its basis the Bank will be able to reduce monthly advances to the income tax by the so-called allowance in the amount equivalent to 1/12 of the amount reducing the tax, as defined in the first range of effective tax scale.
If a Client expects his/her incomes from foreign benefit or pension to exceed the first threshold of the tax scale (i.e. exceed the amount of 85.528 PLN) and intends to tax his/her annual income jointly with a the spouse or as stipulated for single parents, the Client will have the right to submit to the Bank also the "Declaration for purpose of partial reduction of advances collected to the personal income tax" (format of such declaration may be provided to you in the Bank’s branches). On the basis of such Declaration, the tax remitter (Bank) will reduce the amount of advance to PIT to be collected to the rate of 18%.
Client will submit the said Declaration prior to the first payment of receivables in a tax year or prior to expiry of the term of one month, in which the Client started to receive such incomes.
In case of change of facts authorising application of the said allowances the taxpayer (Client) has the duty to notify tax remitter (Bank) accordingly. Subsequently, from the month following the month in which taxpayer (Client) discontinued to meet the allowance conditions, the bank, as tax remitter will collect advances in accordance with generally applicable rules.
What documents should be submitted by the Client receiving benefit or pension from the U.S. for the Bank not to collect tax?
Client should submit to the Bank a document confirming the type of benefit received and the fact that relevant taxi s collected in the U.S. (e.g. certificate from the U.S. Embassy or information on granting benefit from SSA /The United States Social Security Administration/).
According to art. 5 of the Unites States – Poland Income Tax Convention of 1974 (Convention with the U.S.), Poland has the right to tax income from retirement pensions paid out by the U.S. to a person having place of residence within the territory of Poland. Incomes from disability and other benefits (including survivor’s benefits) or retirement pension from the U.S. may be also taxed in the country where such benefit is remitted (i.e. the U.S.). In such case relief from double taxation is provided by art. 20 of the Treaty (so-called method of pro rata application). The method involves crediting against the Polish tax appropriate amount of tax paid to the U.S. In case a benefit is subject to tax at the rate of 25,5% at source in the U.S., the Bank as tax remitter, will deduct this tax from amount of due advance towards PIT (usually the advance is calculated at the rate of 18% and therefore effectively the advance towards PIT is not deducted by the Bank). For this purpose, a Client should submit to the Bank appropriate document confirming the amount of tax deducted in the U.S. (it is necessary to underscore that according to the U.S. tax regulations the tax is assessed against the base of 85% of the benefit value and nominal amount of tax in the U.S. is 30%, hence effectively the rate is 25,5%). The „waiver” of tax collection in total by the Bank applies to Client incomes not exceeding the first threshold in the tax scale (85 528 PLN) i.e. when the tax rate of 18% is applicable.
On the other hand, with respect to the so-called governmental benefits and pensions (i.e. paid out in connection with work in bodies of the U.S. Government administration) the U.S. – Poland Income Tax Convention provides tax exemption in Poland.
Irrespective of whether the taxi s collected or not, the Bank prepares PIT-11 information for the Client and the Head of Tax Office relevant for the Client.
Irrespective whether the Bank waives collection of advance towards income tax, the mandatory health insurance contribution will be collected, obligatorily, at the rate of 9% of the benefit amount.
At what rates does the Bank convert inflows from foreign benefits and pensions to calculate the due tax amount?
Tax on income from foreign benefits and pensions realised in foreign currency must be always paid in to the Tax Office in PLN. To calculate the tax base and the tax itself in PLN the Bank applies average NBP FX rate for a given currency as on the last business day preceding the revenue generation day i.e. inflow of the benefit into the Client account. This is statutory requirement provided for in art. 11a of the Act of 26 July 1991 on personal income tax.
Does the Bank collect tax and contribution in case of the so-called own transfers i.e. in case the principal and beneficiary is the same person (Client makes transfer from own account in another bank into the account in Bank Millennium of a benefit with description indicating that it might be foreign benefit or pension)?
No, the Bank does not collect advances or contributions from transactions executed between Client’s own accounts maintained in different banks. It is not a case of „payment by the bank of a foreign retirement and disability pension” in the meaning of art. 35 sec. 1 pt. 1 of the Act of 26 July 1991 on personal income tax (the PIT Act) and art. 85 sec. 9 of the Act of 27 August 2004 on health care benefits financed from public funds, which should be interpreted as a case when the Bank executes an incoming transfer to the Client’s account from a principal who is an entity disbursing the benefit (appropriate foreign social security institution or such institution’s settlement agent). In such cases (transfers between own accounts) the „original” payment is made to the Client’s bank account maintained in another bank and either this bank (if having head office located in Poland) or the Client, on a stand-alone basis assesses and pays advances in accordance with art. 44 sec. 1a of the PIT Act.
Are the income from foreign widow allowance subject to taxation in Poland?
Widow’s allowance is a type of “survivor’s benefit”. Standard double taxation treaties define such benefit as a specific amount paid out periodically by specified due dates for life or for a specific, measurable period of time as performance of obligation to pay in return for earlier fully fulfilled monetary benefit or equivalent thereof. Benefit titles may vary and are not only connected with bodily injury or disability of the insured person. Thus, if an allowance in the form of annuity paid due to death of a spouse or parent(s) meets the terms of the above definition it is subject to the same taxation rules as other benefits. Taxation (or exemption) of a benefit depends upon country in which it is paid i.e. upon provisions of individual double taxation treaties concluded by Poland.
on the other hand widow’s allowance from France ( Pension de réversion), Italy ( pensione di reversibilità) or Ireland (Widow’s and Widower’s Contributory Pension) are subject to taxation only in Poland.
This material is only for information purpose, in case of doubts regarding individual tax situation please contact relevant Tax Office, Krajowa Informacja Skarbowa (National Tax Information Office) (www.kis.gov.pl) or an independent tax advisor as Bank Millennium S.A. does not provide tax or legal advisory services.

References: art. 30
 art. 5
 art. 30
 art. 30
 art. 5
 art. 17
 art. 17
 art. 162
 art. 17
 art. 24
 art. 21
 art. 30
 art. 119
 § 1
 art. 119
 art. 119
 art. 42
 art. 182
 art. 85
 art. 79
 § 31
 art. 75
 art. 109
 art. 32
 art. 5
 art. 20
 art. 11
 art. 35
 art. 85
 art. 44