If your benefit is subject to U.S. income tax, you must prove the amount withheld as tax in the United States to avoid double taxation. U.S. citizens whose social security benefits have been imposed in the United States must provide proof of the IRS and non-resident aliens whose benefits are subject to «tourism taxation,» either to provide the benefit supplement notice or a statement from the Federal Benefits Unit. To request such a statement, please follow the instructions here. Another important issue for businesses is the taxation of interest and royalties. The good news is that the agreement reduces the tax rate at source of royalties from the current 10 per cent to 5 per cent of the gross amount of royalties. Unfortunately, changes in taxation at the source of savings income have gone in the opposite direction, since the 5% tax rate is intended to replace the current exemption. In addition, the definition of royalties has been broadened by adding payments received in return for the use or right to use commercial, commercial or scientific equipment. Such regulation will undoubtedly apply to cross-border leasing transactions that were previously exempt from withholding tax.

On 13 February 2013, Poland and the United States signed the Convention on the Prevention of Double Taxation and the Prevention of Tax Fraud, taking into account income taxes («conventions»). If the two countries succeed in completing the ratification process by the end of this year, the agreement will enter into force in early January 2014 and will succeed the current agreement. The agreement introduces a number of important changes for businesses, including the taxation of interest, dividends, royalties, branch profits or executive compensation. However, due to the broad scope of the legislation, only a few aspects of the new agreement are discussed below. The basic method to avoid double taxation adopted under the convention is the exemption with progression. This means that income earned outside Poland is not taxable in Poland, but is taken into account in the calculation of the progressive tax rate. On the other hand, the proportional credit method applies to interest collected, royalties, dividends, income from the transfer of assets and other types of income within the scope of the agreement. If you are not a U.S. citizen or resident of the United States, you will be deprived of the federal income tax on your benefits (often referred to as «foreign taxation»).

The tax is 30 percent of 85 percent of your amount, which is 25.5 percent of the payment amount. Dividend taxation is also regulated differently under the new agreement. According to the definition of the agreement, the dividend is the proceeds of shares or other interest on the profits and other rights of a company considered to be share income in the source state. It should be noted, however, that the definition excludes the requirements. The tax rate on dividend sources has generally been set at 15% of the gross amount of the dividend.