The Polish company conducts its business based mainly on providing IT services and sales of software and hardware. The Company enquired the Tax Office whether the fees paid by it to the contractors based in the U.S. and the Netherlands in connection with making available of software, are subject to the flat tax at source of the distribution of software, i.e. in Poland.

The Voivodeship Administrative Court in its judgment of 13 September 2010 case file III SA/Wa 1008/10 held that fees paid for the use of a computer program does not fall within the definition of royalties specified in the agreements on avoidance of double taxation with Holland and the USA. Therefore can not be taxed in Poland.

Categories: computer law | e-law issues | income tax | Polish Act on Legal Persons Income Tax | tax law | Voivodeship Administrative Court.