Withholding Tax (WHT) - Tax Authority Audits in 2026

Withholding tax under the microscope - a record rise in audits

2026 brings a marked increase in the activity of the National Revenue Administration (KAS) in the area of withholding tax (WHT). According to the Deloitte report "Withholding tax (WHT). Tax authority audits in 2025", the number of customs and tax audits concerning WHT rose by as much as 75% in 2025 compared with 2024. This is a record rate of growth, which clearly shows that withholding tax has become one of the Polish tax authorities' priority targets.

This increase is no coincidence. The tax administration has ever better analytical tools at its disposal, and the exchange of tax information between countries under the DAC directives and CRS mechanisms allows the authorities to verify cross-border transactions quickly. Companies making payments to foreign counterparties - dividends, interest, royalties or fees for intangible services - should expect their WHT settlements to be checked in detail.

Importantly, the effectiveness of audits varies between individual customs and tax offices, which means that some regions are more active than others. This does not change the fact that the nationwide trend is unambiguous - WHT audits will continue in 2026 with even greater intensity.

The most common irregularities detected by the tax authorities

The growing number of audits goes hand in hand with an increase in the scale of irregularities detected. The tax authorities are increasingly challenging taxpayers' right to apply reduced WHT rates or exemptions arising from double tax treaties (DTTs) and EU directives. The most frequently identified shortcomings include:

• Lack of due diligence when verifying the foreign counterparty's status as the beneficial owner of the payments made.
• Outdated or incomplete tax residence certificates - the authorities closely examine whether the payer held a valid certificate at the time the payment was made.
• Incorrect classification of payments - e.g. classifying an advisory service as a technical service or vice versa, which affects the WHT rate.
• Improper application of the pay and refund mechanism - procedural errors when submitting WH-OSC statements or applications for a tax refund.
• Artificial corporate structures - the authorities increasingly apply the beneficial owner clause and the principal purpose test (PPT), challenging the right to preferential treatment where an intermediary foreign entity does not carry on genuine business activity.

Each of these irregularities may result in a tax assessment together with late payment interest and, in extreme cases, fiscal criminal liability for the persons responsible for the settlements.

WHT audit trends in 2026 - what to look out for

Analysis of the tax authorities' practice to date allows us to identify several key trends that will shape withholding tax audits in 2026. Above all, the tax authorities are increasingly focusing on transactions with related parties, especially within international groups of companies. Dividend payments to holding companies, royalties for the use of trademarks and fees for management services are the categories of payment that attract the greatest attention from the authorities.

Another clear trend is the increase in the number of court disputes concerning the interpretation of WHT rules. Proceedings are currently under way before the administrative courts concerning, among other things, the scope of the concept of the beneficial owner, the correct application of the beneficial ownership clause in the context of holding companies, and the limits of the pay and refund mechanism for payments exceeding PLN 2 million to a single counterparty in a tax year.

Factors that increase the risk of an audit

It is worth being aware of the circumstances that may increase the likelihood of a WHT audit being opened. The most important risk factors include:

• High cross-border payment amounts, particularly to low-tax jurisdictions.
• Applying preferential WHT rates or exemptions without sufficient documentation confirming the right to apply them.
• Transactions with related parties where there is no business justification for the payment structure.
• Historical irregularities in settlements or discrepancies between IFT-2R returns and the actual state of settlements.

Companies that identify any of these risk factors in their own business should carry out an internal review of their WHT procedures as soon as possible to avoid the negative consequences of an audit.

How to settle withholding tax safely - practical recommendations

The safest approach to settling withholding tax is to implement a comprehensive due diligence procedure, which should cover both formal and substantive aspects. In practice, this means regularly obtaining and verifying current tax residence certificates, analysing the nature of each cross-border payment carefully, and properly documenting the foreign recipient's status as the beneficial owner of the payments.

Another important safeguard is the use of an opinion on the application of preferences (formerly the opinion on the application of an exemption), issued by the Head of the KAS under Article 26b of the CIT Act. Although obtaining such an opinion is time-consuming and requires extensive documentation to be gathered, it provides legal protection for the payer and minimises the risk of the WHT rate applied being challenged during an audit.

It is also essential to monitor legislative changes and case law on an ongoing basis. WHT rules are evolving, and administrative court rulings shape how they are applied in practice. Working with an experienced tax adviser makes it possible to respond quickly to changes and adapt internal procedures to current requirements.

Contact our firm - secure your WHT settlements

The growing intensity of withholding tax audits in 2026 means that settling WHT correctly is no longer a purely formal matter - it is a real safeguard for your company's finances against tax assessments, interest and fiscal criminal liability. Whether you make occasional cross-border payments or handle hundreds of transactions with foreign counterparties, it is worth being certain that your procedures comply with the applicable rules.

Our firm offers comprehensive support in the area of withholding tax - from an audit of your settlements to date, through the implementation of due diligence procedures, to representation in audit proceedings and disputes before the administrative courts. Contact us today to arrange a consultation and protect your business against the tax risk associated with WHT.