Withholding tax (WHT) on hosting services in Poland – Supreme Administrative Court of Poland (NSA) judgments

Withholding tax (WHT) has once again become one of the key issues for businesses in Poland making payments to foreign contractors. Following earlier disputes over digital and cloud-based services, this direction has been reinforced by judgments of the Supreme Administrative Court of Poland (NSA) issued in 2025. Of particular importance is the judgment of October 30, 2025, case ref. II FSK 183/23, in which the NSA adopted a taxpayer-unfavourable approach, concluding that, in a specific settlement model, payments for hosting may be linked to an obligation to withhold tax at source. In practice, this means that WHT risk in Poland now needs to be assessed more broadly than it was just a few years ago.

This is not, however, an entirely new development. Polish tax authorities had already been taking an increasingly restrictive approach to settlements for digital and cloud services, as we discussed in more detail in the article Withholding tax (WHT) and cloud services – increasingly strict approach by tax authorities in Poland. The NSA judgments issued in October 2025 show that the issue is no longer limited to individual tax rulings, but is now also reflected in court case law.

Why the October 30, 2025 NSA judgment matters

The judgment in case II FSK 183/23 is particularly important because it strengthens a broad interpretation of Article 21(1)(1) of the Polish Corporate Income Tax Act (the Polish CIT Act). The main legal framework for WHT in Poland is set out in the Polish CIT Act, while official Ministry of Finance guidance confirms that withholding tax applies to specified categories of cross-border payments and remains a major compliance area for Polish payers.

Based on available summaries of the ruling, the NSA accepted the view that access to equipment may also be virtual in nature, and that the concept of “equipment” should not be interpreted narrowly as applying only to equipment used in traditional industrial activity. This is precisely the point that currently attracts the most attention from businesses using hosting, server infrastructure and selected cloud services in Poland.

In practical terms, this means that a hosting payment should not be assessed solely by reference to the commercial name of the service. Increasingly, what matters is the actual model of using technical resources, the scope of the user’s rights, and whether the remuneration can be linked to the right to use specific infrastructure. This is where most current WHT doubts arise.

What withholding tax covers under the Polish CIT Act

For business practice in Poland, the key provisions are Article 21(1) and Article 26 of the Polish CIT Act. These rules mean that a Polish entity making certain payments to a foreign contractor may act as a withholding tax remitter. This may cover not only certain royalty-type payments, but also selected intangible services and payments for the use of, or the right to use, industrial, commercial or scientific equipment. The Ministry of Finance also highlights the importance of the payer’s duties, including collection mechanics and the broader WHT compliance framework.

From a business perspective, four practical conclusions are particularly important:

• the service name used in the contract does not itself determine the tax classification,
• payments for hosting, cloud solutions or digital services require a separate WHT analysis in Poland,
• in some cases, not only domestic rules but also the relevant double tax treaty will matter,
• failure to carry out a proper assessment may expose the Polish payer to tax arrears risk.

The October 9, 2025 NSA judgment also matters for WHT practice

The second important judgment, issued by the NSA on October 9, 2025, case ref. II FSK 112/23, concerned intermediation services and the coordination of centralised purchasing. In that case, the court also confirmed a broad approach to the catalogue of similar services referred to in Article 21(1)(2a) of the Polish CIT Act.

In its reasoning, the court emphasised that whether a service falls within the scope of withholding tax depends on its actual nature, not merely on the label given to it by the contracting parties.

This is also an important warning for companies purchasing digital, technology or operational services from foreign suppliers. If the service contains elements similar to advisory, advertising, management and control, market research or data processing services, the tax authorities may attempt to classify it as falling within the WHT catalogue. This means that the tax risk does not end with hosting alone.

What a Polish company should verify before paying for hosting or similar services

Before making a payment to a foreign contractor, a Polish company should verify at least the following:

• what the actual subject matter of the service is, not only how it is named in the contract,
• whether the service consists solely in delivering a result, or also involves the use of technical infrastructure,
• whether the settlement model includes licence-related elements or access to resources that may be treated as industrial equipment,
• whether the service includes elements similar to those listed in Article 21(1)(2a) of the Polish CIT Act,
• whether the company holds a valid certificate of residence of the contractor,
• whether the relevant double tax treaty can be applied,
• whether due diligence has been observed on the payer’s side.

This is particularly important in international groups and in companies that regularly purchase services from non-residents. In practice, the risk does not concern only large corporate structures. It may also arise in medium-sized businesses using foreign providers of hosting, software, analytics tools or operational support.

Does every hosting payment automatically create a WHT obligation?

That would be too simplistic. The 2025 NSA judgments clearly strengthen an unfavourable trend for some taxpayers, but they do not mean that every hosting payment automatically falls within withholding tax in Poland.

The specific facts of the case, the wording of the agreement, the actual service model and the possible application of a double tax treaty all remain crucial. For businesses, this means above all the need to move away from automatic assumptions. In practice, it is incorrect both to assume that every hosting service is tax-neutral and to mechanically conclude that every such payment always requires 20% WHT to be withheld. The correct approach should always be based on an analysis of the specific settlement model.

How to prepare your company for safer WHT settlements

After the recent NSA judgments, the most reasonable approach is to organise the process of reviewing cross-border payments. A good practice is to establish an internal review path that allows potentially WHT-sensitive transactions to be identified before payment is made.

In practice, businesses should focus on three areas:

• contract review – to determine the real nature of the service and identify licence-related, infrastructure-related or intangible elements,
• tax documentation – especially the certificate of residence, contractor verification and the basis for applying a preference,
• internal procedures – so that the finance, accounting and legal teams follow consistent rules.

In companies that regularly settle payments to foreign contractors, support in tax advisory in Poland may also be helpful. A well-prepared analysis can significantly reduce the risk of disputes with the Polish tax authorities and costly corrections.

What these judgments mean for business

The main conclusion is practical: withholding tax (WHT) in the area of digital and intangible services has become an even more sensitive part of CIT compliance in Poland. The NSA judgment of October 30, 2025 increases the risk that hosting payments may be treated as income subject to WHT, while the October 9, 2025 judgment confirms a broad approach to similar services.

For businesses, this means the need for more precise payment classification, a review of existing contracts and greater caution when settling with foreign suppliers.

The earlier a company organises this area, the easier it will be to reduce the risk of payer liability, tax arrears and problems during a tax audit. For entities using multiple foreign technology or intangible services, this review should now be treated as part of ongoing tax risk management in Poland.

Case law:

• Judgment of the Supreme Administrative Court of Poland (NSA) of October 30, 2025, case ref. II FSK 183/23,
• Judgment of the Supreme Administrative Court of Poland (NSA) of October 9, 2025, case ref. II FSK 112/23.

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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