Taxpayers, when conducting business activity, often purchase services for the production of an advertising film. It often happens that this acquisition takes place from entities that are tax residents of jurisdictions other than the territory of the country. Then, in such a transaction, the issue of the need to pay tax at source should be analysed each time.
Pursuant to Article 21 sec. 1 point 1 of the Polish CIT Act, the withholding tax of 20% covers, i.e. income of foreign taxpayers from copyright or related rights, (…) including the sale of these rights. Taking into account the above, literal wording of the Polish CIT Act, it directly covers the sale/transfer of copyrights as withholding tax.
At the same time, according to Article 21 sec. 1 point 2a of the of the Polish CIT Act, the withholding tax of 20% also covers, m.in, advertising services and services of a similar nature.
Taking into account the above, in the first place, it would be necessary to analyse what exactly is contained in the contract for the performance of a given service. The contract should indicate whether we are dealing with strictly advertising/marketing services or whether the remuneration primarily includes the transfer of all economic rights to the prepared film.
In this article, we focus on the agreement concerning the strict transfer of the economic right to the film. It should be borne in mind that tax authorities treat the concept of advertising services quite broadly. For example, the individual interpretation of the Director of the National Tax Information of 12 August 2026 (file reference number 0114-KDIP2-1.4010.216.2026.2.PP) indicates that advertising includes activities aimed at providing information about goods, their advantages or the method of acquisition, as well as video materials serving this purpose.
However, Article 21 sec. 2 of the Polish CIT Act requires us to take into account the provisions of the relevant double taxation treaty.
By the way of example, under Article 12 sec. 3 of the Double Taxation Treaty with Germany, “royalties” are defined as any kind of royalties paid for the use or right to use any copyright (…), including films for cinemas. At the same time, Article 12 sec. 2 provides for the possibility of taxing royalties in the source country, up to a maximum of 5% of the gross amount.
However, what is important. In the case of a full transfer of copyright, the right to use the work is not made available while retaining the rights on the part of the creator. There is a definitive transfer of economic rights to the purchaser. Consequently, the payment for such a transfer does not constitute a license fee within the meaning of Article 12, including this example, of the Polish-German DTT.
In this regard, it is worth referring to paragraphs 8.2 and 15 of the OECD Commentary to Article 12 of the OECD Model Tax Convention, which states that if remuneration is paid for the transfer of full ownership of rights covered by the definition of royalties, it is not remuneration for the “usufruct or right of use” of those rights.
According to the above-mentioned DTT, these will be profits from the transfer of ownership of any property specified in Article 13 sec. 5 of the DTT.
This is confirmed, m.in, by the individual interpretation of the Director of the National Tax Information of 9 January 2018 (file reference number 0111-KDIB1-2.4010.404.2017.1.BG), in which the Authority indicated that: “In this state of affairs, Article 13(5) of the above-mentioned Convention will be applicable in the present case, according to which income from the transfer of ownership of any property other than that referred to in paragraphs 1, 2, 3 and 4 of this Article shall be subject to taxation only in the State in which the person transferring the title of ownership has his or her place of residence or registered office and in which he or she is subject to tax on such income.
Taking into account the above-mentioned provisions, it should be stated that the profits from the transfer of copyright obtained by the Ukrainian Company should be qualified under the above-mentioned Convention as profits from the transfer of title to property, they will be subject to taxation only in the country in which the transferor of ownership has its registered office (tax residence), if it is documented by a certificate of residence”.
As a consequence, the remuneration for the definitive transfer of economic copyrights by the counterparty (in this example a German one) should be classified as profit from the transfer of assets, subject to taxation only in the country of its residence. It is necessary to have a current certificate of residence for such settlement. Of course, the above will apply if the contractor does not have an establishment in Poland that would participate in a given transaction.
