Special rules for frontier workers are contained in the following double taxation conventions: the Protocol would not change the method used by Poland to avoid double taxation of its taxable income in the Netherlands (the proportional tax credit method is maintained). Therefore, Polish taxpayers who receive income in the Netherlands are still entitled to the relief of the abolition on the basis of the principles referred to in the provisions of the Individual (Personal) Income Tax Act, but these rules may change. Contrary to what was previously announced, the Protocol will not change the method of preventing double taxation applied by Poland to its taxpayers who receive income in the Netherlands (the proportional tax credit method is maintained). On 29 October 27, 2020, representatives of the Netherlands and Polish Government signed a Protocol revising the Agreement between the Republic of Poland and the Kingdom of the Netherlands for the avoidance of double taxation and the prevention of fiscal evasion with regard to tax on income (the Convention). The protocol also introduces a “test of principle”, which is to serve as an anti-abuse clause, which prevents the misuse of double taxation conventions. Generally speaking, the main test provides that no favourable provision of a tax treaty can be invoked in a situation where obtaining the contractual advantage was one of the main purposes of a given transaction. The trial application may, for example, give rise to an obligation to levy a withholding tax on payments made by undertakings established in Poland to undertakings established in the Netherlands at the national rate (with the exception of the rates or exemptions provided for in the contract) if, in the circumstances, the application of the provisions of the Agreement is considered by the tax authorities to be an abuse of its provisions. Below we present the main changes between the current text of the Double Taxation Convention between Poland and the Kingdom of the Netherlands and the Protocol. The Protocol also amends the principle that a legal person established in the territory of two States considers that it has its registered office in the state of its effective management. . .
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