Poland-Singapore DTAA: Tax Treaty Guide with Examples
The Singapore–Poland Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty designed to ensure that individuals and businesses are not taxed twice on the same income when operating across both countries. Originally signed on 4 November 2012, the agreement came into effect from 1 January 2015.
This treaty plays a crucial role in clarifying taxing rights between Singapore and Poland. It reduces or eliminates double taxation through mechanisms such as tax exemptions, reduced withholding tax rates, and foreign tax credits. By doing so, the DTAA facilitates smoother cross-border investment, trade, and mobility of professionals.
This guide is intended for:
- Individuals who are tax residents of either Singapore or Poland and earn income from the other country,
- Companies operating or providing services across both jurisdictions.
It explains how the treaty applies to common income types such as dividends, interest, royalties, capital gains, business profits, and employment income, and includes practical guidance and examples. For more on how to begin operations in Singapore, refer to our Singapore Company Registration Guide.
This article covers the following topics of the Singapore-Poland DTAA:
- Purpose & Scope of the Agreement
- Key Terms
- Tax on Business Profits
- Tax on Dividends
- Tax on Interest Income
- Tax on Royalties
- Tax on Personal Services
- Tax on Director Fee
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Poland-Singapore DTAA: Purpose & Scope
The purpose of the Singapore–Poland Double Taxation Avoidance Agreement (DTAA) is to prevent individuals and businesses from being taxed twice on the same income when operating across both jurisdictions. By allocating taxing rights between the two countries, the DTAA removes uncertainty, enhances transparency, and reduces the overall tax burden on cross-border transactions.
Who is Covered
The DTAA applies to residents of either Singapore or Poland. This includes:
- Individuals
- Companies
- Other legal persons that are liable to tax in their respective countries based on domicile, residence, place of management, or similar criteria.
What is Covered
The agreement provides treaty-based tax rules for common categories of cross-border income, including business profits, dividends, interest, royalties, capital gains, director’s fees, employment income, independent and dependent personal services, and other residual income. It also covers taxation of government service remuneration, pensions, artistes and sportsmen, and students. Additionally, the agreement incorporates anti-abuse rules and allows for Mutual Agreement Procedures (MAP) and exchange of information between tax authorities to resolve disputes and combat tax evasion.
For a deeper understanding of Singapore’s tax framework, explore our guides on the:
Poland-Singapore DTAA: Key Terms Defined
Person
Tax Resident
A “resident of a Contracting State” refers to any person who, under the laws of that country, is liable to tax.
- If an individual qualifies as a tax resident in both countries, tie-breaker rules are used to determine a single residence, based on factors such as permanent home, centre of vital interests, habitual abode, and nationality.
- For companies and other legal entities, residence is determined by the place of effective management.
Permanent Establishment (PE)
A “Permanent Establishment” (PE) is defined as a fixed place of business through which the business of an enterprise is wholly or partly carried on. This includes offices, factories, branches, and places of management. Certain thresholds and conditions apply, such as:
- Building sites or construction projects qualify only if they last more than 12 months.
- Service provision may constitute a PE if carried out in the other state for more than 365 days within a 15-month period.
Activities of a preparatory or auxiliary nature, such as warehousing or information gathering, are excluded from the PE definition.
Withholding Tax
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Poland–Singapore DTAA: Tax on Business Profits
How business profits are taxed under the treaty
Under Article 7 of the Singapore–Poland DTAA, business profits are generally taxable only in the country of residence of the enterprise. However, if the enterprise carries on business in the other country through a permanent establishment located there, then the profits attributable to that PE may also be taxed in the source country.
Below are practical examples illustrating how business profits are taxed depending on the presence or absence of a PE.
1. Singapore Company Earning from Poland With No PE in Poland
- Scenario: A Singapore-based company provides consulting services to Polish clients remotely and has no office, staff, or agents in Poland.
- Tax treatment:
- Under Article 7, the income is taxable only in Singapore.
- Poland has no taxing rights, as there is no PE in Poland.
- Result: The company pays 0% Polish tax, and normal Singapore tax applies on its global income.
2. Singapore Company Earning from Poland With PE in Poland
- Scenario: A Singapore company opens a representative office in Warsaw to serve local clients and carries out contracts through on-the-ground staff.
- Tax treatment:
- Profits attributable to the PE in Poland are taxable in Poland.
- The remaining profits are taxable in Singapore, with foreign tax credit available to avoid double taxation.
- Example:
- Total profit: S$500,000
- PE-attributable profit: S$300,000
- Polish tax: Assume corporate rate of 19% → S$57,000
- Singapore tax (at 17%) on full S$500,000 → S$85,000
- Foreign tax credit: S$57,000
- Net Singapore tax payable: S$28,000
3. Polish Company Earning from Singapore With No PE in Singapore
- Scenario: A Poland-based IT firm sells software licenses to customers in Singapore via its website, without any local presence.
- Tax treatment:
- The profits are taxable only in Poland.
- Singapore cannot tax the business income under Article 7.
- Result: The Polish company pays tax only in its home country.
4. Polish Company Earning from Singapore – With PE in Singapore
- Scenario: A Polish engineering firm establishes a project office in Singapore for a 15-month infrastructure contract.
- Tax treatment:
- Profits attributable to the Singapore PE are taxable in Singapore.
- Poland may also tax global income, but should grant foreign tax credit.
- Example:
- Total profit: S$500,000
- PE-attributable profit in Singapore: S$400,000
- Singapore tax: 17% → S$68,000
- Poland tax: 19% on global profits, but credit for S$68,000 available
Poland–Singapore DTAA: Tax on Dividends
How dividends are taxed under the treaty
Under Article 10 of the Singapore–Poland DTAA, dividends paid by a company in one country to a resident of the other country may be taxed in both countries, but the withholding tax in the source country is limited.
Withholding Tax Limits
If the recipient is the beneficial owner of the dividends:
- 5% of the gross amount applies if the recipient is a company (not a partnership) that directly holds at least 10% of the capital of the paying company for an uninterrupted 24-month period including the date of payment
- 10% of the gross amount applies in all other cases
Dividends paid to governmental entities (e.g. central banks, sovereign funds) are fully exempt from tax in the source country if the receiving institution is listed under Article 10(4) and (5).
In practice, Singapore does not impose withholding tax on dividends, so dividends paid by a Singapore company to a Polish resident are exempt under domestic law, regardless of the DTAA rate.
Dividends Paid by a Singapore Company to a Polish Resident
- A Polish company owns 12% of a Singapore company for more than two years and receives S$500,000 in dividends.
- Under Singapore domestic law, no withholding tax is imposed on dividends.
- The DTAA allows for a maximum 5% tax, but since domestic law prevails with a 0% rate, there is no tax withheld in Singapore.
- The Polish company receives the full S$500,000.
- Taxation occurs in Poland based on Polish domestic rules, with relief depending on Polish tax law.
Dividends Paid by a Polish Company to a Singapore Resident
- A Singapore company owns 15% of a Polish company and receives S$500,000 in dividends.
- Poland’s domestic withholding tax is typically 19%.
- Under the DTAA, the tax is reduced to 5% because of the qualifying shareholding and holding period.
- Poland withholds 5% of S$500,000, which equals S$25,000.
- In Singapore, the full S$500,000 is taxable, but the company can claim a foreign tax credit of S$25,000.
- Singapore corporate tax on S$500,000 at 17% equals S$85,000.
- After applying the foreign tax credit, the net Singapore tax payable is S$60,000.
For more details on how cross-border dividends are taxed under local rules, refer to our Singapore Withholding Tax Guide.
Poland–Singapore DTAA: Tax on Capital Gains
How capital gains are taxed under the treaty
Under Article 13 of the Singapore–Poland DTAA, capital gains are generally taxable only in the country of residence of the person disposing of the asset. However, there are important exceptions that allow the source country to tax specific types of gains.
When the Source Country Can Tax Capital Gains
- Gains from the sale of immovable property located in the other country may be taxed in that country.
- Gains from the sale of movable property forming part of a permanent establishment or fixed base in the other country may be taxed in that country.
- Gains from the alienation of ships or aircraft operated in international traffic are taxable only in the country where the enterprise's place of effective management is located.
- Gains from the sale of unlisted shares that derive more than 75% of their value from immovable property in the other country may be taxed in that country.
- All other gains are taxable only in the country of residence of the seller.
Examples:
Sale of Polish Shares by a Singapore Resident
- A Singapore company sells unlisted shares in a Polish company for a S$500,000 gain.
- The shares derive 80% of their value from Polish real estate.
- Under Article 13(4), Poland may tax the gain.
- Singapore will also tax the worldwide income but will allow a foreign tax credit for the Polish tax paid.
- Example: Polish tax on capital gains is 19%, or S$95,000.
- Singapore tax on S$500,000 is S$85,000.
- After applying the foreign tax credit (up to the amount of Singapore tax), no additional Singapore tax is payable, but excess Polish tax is not refunded.
Sale of Singapore Shares by a Polish Resident
- A Polish investor sells shares in a Singapore company for a S$500,000 gain.
- The shares do not derive value from Singapore real estate.
- Under Article 13(5), the capital gain is taxable only in Poland.
- Singapore does not impose capital gains tax, so no tax is charged at source.
Poland–Singapore DTAA: Tax on Interest Income
How interest income is taxed under the treaty
Under Article 11 of the Singapore–Poland DTAA, interest income arising in one country and paid to a resident of the other country may be taxed in both countries, but the withholding tax in the source country is capped at 5%, provided the recipient is the beneficial owner of the interest.
Full Exemption in Certain Cases
Interest is fully exempt from source-country tax if it is paid to:
- The government of the other Contracting State
- The central bank
- A statutory body or institution wholly or mainly owned by the government
- Singapore’s GIC Pte Ltd (Government of Singapore Investment Corporation)
- Poland’s Bank Gospodarstwa Krajowego
These exemptions apply only if the recipient is the beneficial owner of the interest and falls under the categories listed in Article 11(3).
Interest Paid by a Singapore Company to a Polish Resident
- A Singapore company pays S$100,000 in interest to a Polish bank that qualifies as the beneficial owner.
- The Polish recipient is not a government entity, so the 5% DTAA cap applies.
- Singapore withholding tax of 5% is imposed: S$5,000.
- The Polish recipient declares the income in Poland and receives a foreign tax credit for the S$5,000 paid in Singapore.
- Singapore has no further tax obligations beyond the withheld amount.
Interest Paid by a Polish Company to a Singapore Resident
- A Polish company pays S$100,000 in interest to a Singapore-resident company.
- The recipient is the beneficial owner and does not qualify for full exemption.
- Poland applies withholding tax at the DTAA-capped rate of 5%: S$5,000 withheld.
- The Singapore company declares the income in Singapore and receives a foreign tax credit for the Polish tax paid.
- Example: Singapore tax on S$100,000 at 17% = S$17,000, minus S$5,000 foreign tax credit, net tax payable = S$12,000.
Poland–Singapore DTAA: Tax on Royalties
How royalty income is taxed under the treaty
Under Article 12 of the Singapore–Poland DTAA, royalties arising in one country and paid to a resident of the other country may be taxed in both countries, but the withholding tax in the source country is capped depending on the type of royalty income.
Withholding Tax Limits
If the recipient is the beneficial owner of the royalties:
- 2% applies to royalties paid for the use of, or the right to use, any industrial, commercial, or scientific equipment
- 5% applies in all other cases, such as payments for the use of intellectual property, copyrights, patents, designs, software, and know-how
These caps override domestic withholding tax rates in Singapore and Poland. However, Singapore does not tax royalty payments made to non-residents for use outside Singapore, so many outbound payments may be exempt under domestic law.
Royalty Paid by a Singapore Company to a Polish Resident
- A Singapore company pays S$100,000 to a Polish company for the use of proprietary software.
- The Polish recipient is the beneficial owner and does not operate through a Singapore permanent establishment.
- The royalty is classified as 5% type under the DTAA.
- Singapore domestic law imposes 10% withholding tax on royalties, but the DTAA limits it to 5%, so S$5,000 is withheld.
- The Polish company declares the income in Poland and may claim foreign tax credit for the Singapore tax withheld.
Royalty Paid by a Polish Company to a Singapore Resident
- A Polish company pays S$100,000 to a Singapore equipment leasing firm for the use of commercial machinery.
- The royalty falls under the 2% category (use of industrial equipment).
- Poland applies withholding tax at the DTAA rate: S$2,000 withheld.
- The Singapore recipient declares the income in Singapore.
- Singapore taxes the royalty income at the normal rate (e.g., 17%), and allows a foreign tax credit for the Polish tax withheld.
Poland–Singapore DTAA: Tax on Personal Services
How Independent Services are taxed under the treaty
Under Article 14 of the Singapore–Poland DTAA, income earned by an individual from independent personal services (such as professional, technical, or consulting work) is taxable only in the country of residence, unless one of the following conditions is met:
- The individual has a fixed base regularly available to them in the other country; or
- The individual is present in the other country for more than 365 days within any 15-month period
In either of those cases, the source country may tax only the portion of income attributable to the fixed base or the services performed during the stay.
Services by a Singapore Resident to a Polish Company
- A Singapore-based consultant provides legal advice to a Polish client remotely and earns S$100,000.
- The consultant does not have a fixed base in Poland and does not travel to Poland.
- Under the DTAA, the income is taxable only in Singapore.
- Poland has no taxing rights over the income.
Now suppose the same consultant travels to Poland and works there for 380 days over multiple trips within a 15-month period:
- Poland may now tax the portion of income earned from work performed in Poland.
- If S$60,000 of the total income relates to services provided while in Poland:
- Poland taxes the S$60,000
- Singapore taxes the full S$100,000, but provides a foreign tax credit for the Polish tax on the S$60,000
Services by a Polish Resident to a Singapore Company
- A Polish architect is hired by a Singapore firm to design a facility and earns S$100,000.
- The architect works entirely from Poland, with no travel to Singapore and no fixed base in Singapore.
- Under the DTAA, the income is taxable only in Poland.
- Singapore has no taxing rights.
However, if the architect sets up a temporary office in Singapore and performs the work locally for 14 months:
- The office is treated as a fixed base
- Singapore may tax the portion of income related to services performed there
- Poland taxes the full amount, but allows a foreign tax credit for Singapore tax paid
How Dependent Services are taxed under the treaty
Under Article 15 of the Singapore–Poland DTAA, employment income (i.e., salaries, wages, and similar remuneration) is generally taxable in the country where the work is physically performed. However, an exception applies if all three of the following conditions are met:
- The employee is present in the other country for no more than 183 days in any twelve-month period beginning or ending in the relevant fiscal year
- The remuneration is paid by, or on behalf of, an employer who is not a resident of the country where the work is performed
- The remuneration is not borne by a permanent establishment or fixed base in that country
If all conditions are satisfied, the income is taxable only in the employee’s country of residence.
Example: Polish Resident Working in Singapore
- A Polish employee is seconded to a Singapore firm for 120 days in a calendar year and is paid by a Polish employer.
- The salary is not charged to a Singapore PE.
- All three conditions are met, so the income is taxable only in Poland.
- Singapore has no taxing rights under the treaty.
If the same employee stays in Singapore for 200 days, or if the salary is recharged to a Singapore PE, then:
- Singapore acquires the right to tax the income attributable to work performed in Singapore
- Poland also taxes the global income, but provides a foreign tax credit for the Singapore tax paid.
Example: Singapore Resident Working in Poland
- A Singaporean employee is sent to work in Poland for 100 days and continues to be paid by a Singapore employer.
- There is no Polish PE involved.
- The income is taxable only in Singapore, and Poland does not tax it.
However, if the stay in Poland exceeds 183 days, or if a Polish branch bears the cost:
- Poland gains taxing rights over the employment income.
- Singapore will tax the full income as well but allow a foreign tax credit for Polish tax.
Poland–Singapore DTAA: Tax on Director Fee
How director fee is taxed under the treaty
Under Article 16 of the Singapore–Poland DTAA, director’s fees and similar payments received by a resident of one country in their capacity as a board member of a company located in the other country are taxable in the country where the company is resident.
This rule applies regardless of where the services are physically performed and is an exception to the general rule for dependent or independent services.
Fee Paid by a Singapore Company to a Polish Resident
- A Polish individual is a member of the board of directors of a Singapore company and receives S$100,000 as director’s fees.
- Under Article 16, the full amount is taxable in Singapore.
- Singapore taxes director’s fees as income, subject to withholding or declaration depending on the recipient’s presence and filing status.
- The Polish resident must also declare the income in Poland, but can claim foreign tax credit for Singapore tax paid.
Fee Paid by a Polish Company to a Singapore Resident
- A Singapore resident serves on the supervisory board of a Polish company and receives S$100,000 as director’s remuneration.
- The full amount is taxable in Poland under the treaty.
- Poland imposes income tax based on local rates, and may withhold tax at source.
- The Singapore resident must report the income in Singapore but can claim a foreign tax credit for Polish tax withheld, subject to local rules.
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