Poland approved the law ratifying the protocol to its tax treaty with South Korea. The law was gazetted on 8 May 2014.
The protocol, signed 22 October 2013, amends several articles of the treaty, including the articles regarding taxes covered, general definitions, shipping and air transport, interest, royalties, capital gains, and government service. The articles on associated enterprises, the elimination of double taxation, and exchange of information are replaced, and an article for limitation on benefits is added.
The withholding taxes on dividends and interest will remain the same, 5%/10% and 10% respectively. However, the withholding rate on royalties will be reduced to 5% from the current 10%.
A resident of a Contracting State will be denied the benefits of the treaty in respect of dividends, interest, royalties, capital gains, and other income if the main purpose or one of the main purposes of any person concerned with the creation or assignment of a share, a debt-claim, or a right in respect of which the income is paid is to receive the benefits of the treaty.
The protocol will enter into force 30 days after the ratification instruments are exchanged. In general, the provision of the protocol will apply from 1 January of the year following its entry into force. However, the provisions of the protocol for exchange of information requests apply the date of its entry into force and in regard to tax periods beginning on or after 1 January of the year following its signature (1 January 2014).
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