Beer, dividends and a PLN 512m tax bill

Tax inspectors have determined that Poland’s largest beer producer understated its corporate income tax as a result of a series of intra-group transactions. Although Kompania Piwowarska disputes the findings and has announced that it will challenge the decision in court, it has already paid about EUR 120 million to the state budget, covering outstanding tax liabilities and accrued interest.

It is the biggest success in the history of Poland’s tax inspectors. Following an audit of corporate income tax (CIT) settlements for 2019–2020, controllers uncovered that one company had understated its CIT liabilities by - no small sum - PLN 0.5 billion (about EUR 120 million).

Citing the confidentiality of the proceedings, the National Revenue Administration (Krajowa Administracja Skarbowa - KAS) disclosed only that the case concerned “one of the Polish companies belonging to an international holding group in the food industry,” and declined to provide further details. XYZ, however, has managed to uncover the specifics of the case.

How did the underpayment occur?

The dispute centers on so-called withholding tax (WHT), which has been under heightened scrutiny by the tax authorities for several years. As a rule, withholding tax applies when a company makes certain payments - such as dividends, interest, or license fees - to a foreign recipient. The obligation to withhold and remit the tax rests with the payer, that is, the company making the payment.

In this case, according to information from the KAS, in 2019–2020:

• the company paid dividends to another Polish entity,
• that entity then passed the funds on,
• with the ultimate beneficiary said to be a company outside the European Union and the European Economic Area.

Inspectors found that during the period under review “the Polish company operated within a group in which the same individuals performed management, supervisory, and control functions.” It was this structure that raised red flags for the authorities. Such an arrangement, they claim, may have been designed to circumvent the obligation to pay withholding tax in Poland.

As a result, the tax authority challenged the company’s filings and ordered it to pay more than PLN 512 million (about EUR 120 million) in back taxes, including interest.

The company vows to fight

Who has found itself in the tax authorities’ crosshairs? Based on publicly available financial statements and information on ownership structures in the sector, we have established that the company referred to in the National Revenue Administration statement is Kompania Piwowarska. The brewer is linked to Asahi Poland BV, which belongs to the global Asahi Group Holdings. The Japanese giant operates outside European jurisdiction.

In response to our questions, Kompania Piwowarska maintains that it acted in accordance with applicable regulations and argues that the tax authorities’ interpretation is, in its view, incorrect.

“Kompania Piwowarska does not agree with the decision of the supervisory authority and intends to challenge it in line with the procedures provided for by law. Until the appeal process is conclusively completed, we see no possibility of further commenting on this matter,” the company said in a written statement.

According to information from the National Revenue Administration (KAS), the audits and proceedings conducted so far have resulted in decisions against which the company filed appeals. These decisions were upheld by the second-instance authority, and the company subsequently paid over PLN 512 million (about EUR 120 million) into the state budget. Under the procedure, it is now entitled to lodge an appeal with the District Administrative Court (WSA).

We therefore asked experts what may have gone wrong in the application of the dividend exemption.

The dividend exemption in practice

Although the scale of the budget shortfall is striking, our interlocutors are not surprised by the inspection itself. Reviews related to withholding tax have, in recent years, become routine for the tax authorities. Mikołaj Kondej, a certified tax adviser at PwC, explains how companies apply the dividend exemption and under what circumstances the tax authorities may challenge its validity.

Under Poland’s Corporate Income Tax (CIT) Act, the withholding tax rate on dividends is 19% of the revenue earned. A Polish payer is therefore required to withhold this amount when paying a dividend to a foreign entity. Article 22(4) of the Act, however, provides for exemptions.

The exemption may be applied if the paying entity is a Polish tax resident and the beneficiary is a company domiciled in the European Union or the European Economic Area. In addition, the dividend recipient must hold at least 10% of the payer’s share capital for a minimum of two years.

The second mechanism that allows tax preferences to be applied is the payment of a dividend to an entity outside the European Union - provided that the relevant country has a double taxation treaty with Poland in place. In such cases, a reduced withholding tax rate may apply, or the dividend may be fully exempt from taxation.

“In this case, we are dealing with a very large amount of tax arrears. The company applied an exemption, but the tax authority challenged its validity and assessed the tax. Most disputes arise in situations where there are other entities between the company paying the dividend and the parent company. This raises the question of whether their existence has genuine economic substance. That is a matter of judgment, and such cases very often end up before the administrative courts,” explains Mikołaj Kondej.

A costly intermediary

“Experts from the KAS demonstrated that the Polish company failed to withhold tax on paid dividends. The company applied the exemption provided for in the CIT Act. By relying on an artificial structure, devoid of any economic purpose other than obtaining a tax advantage, it breached the provisions of the CIT Act as well as the OECD Model Tax Convention,” the National Revenue Administration said in a statement.

Patryk Chmura, a manager and attorney-at-law at EY, points to a ruling by the Supreme Administrative Court (NSA) of 13 August 2025 (case no. II FSK 1510/22). In that judgment, the court held that when paying a dividend, the payer is not obliged to verify whether the recipient is the beneficial owner of the funds.

“In this case, however, the authority chose to carry out such a verification. The issue concerned a situation in which the dividend was passed on further - to another entity after the parent company. The Polish company was therefore not the final recipient of the dividend, but merely acted as an intermediary,” Mr. Chmura explains.

The expert also points to the need, in such cases, to examine so-called business substance and business purpose.

“This involves assessing the company’s genuine economic activity and its actual purpose. The authority concluded that the entity receiving the dividend was not its beneficial owner and that the tax exemption therefore should not apply. As a consequence, the 19% withholding tax should have been collected. The size of the reassessment is thus the result of challenging the dividend exemption across a chain involving both Polish and foreign entities,” explains Patryk Chmura.

The tax authorities are not letting up

Wojciech Majkowski, a legal and certified tax adviser at KPMG, adds that the number of similar cases has been rising steadily.

“In recent months, the KAS has regularly reported uncovering significant arrears in withholding tax. This is the result of numerous audits and tax proceedings that have been conducted intensively since the beginning of 2023,” the expert notes.

The tax authorities’ primary targets are Polish companies that form part of international corporate groups. As Wojciech Majkowski emphasizes, the authorities have adopted a particularly restrictive approach toward such entities.

“This is facilitated by complex regulations and the use of vague concepts whose interpretation evolves over time. While in some cases the authorities’ actions do lead to the exposure of structures genuinely designed to avoid taxation, in many instances the rulings raise serious doubts and become the subject of disputes,” he concludes.

In the expert’s view, the country’s budgetary needs - amid rising defense spending - are also a significant factor. The issue, therefore, is not only about ensuring fair competition, but also about revenue.

“All indications suggest that the tax authorities’ restrictive approach to withholding tax will become a permanent feature of Poland’s tax landscape. This is confirmed, among other things, by the establishment within the KAS of a competence center dedicated to combating aggressive tax planning in corporate income tax,” explains Wojciech Majkowski.

How to protect yourself against a costly tax decision

Experts list three mechanisms that can help safeguard dividend payments from a tax perspective.

• Pay and refund: In place since 2022, this mechanism requires the payer to withhold tax at the standard rate. If the conditions for an exemption or a reduced rate are subsequently met, the taxpayer may apply for a refund.
• Payer’s statement: Transactions exceeding PLN 2 million (about EUR 470,000) may also qualify for an exemption based on a formal statement by the payer. In such a declaration, the company confirms that it holds all documents required by law and is not aware of any circumstances that would prevent the application of the tax preference.
• Opinion on the application of preferences: Another way to apply an exemption or a reduced rate is to obtain an official opinion confirming the right to apply withholding tax preferences.

Key Takeaways

1. Inspectors from Poland’s National Revenue Administration (KAS) have determined that Kompania Piwowarska - a beer producer owned by Japan’s Asahi Group - underpaid corporate income tax (CIT) as a result of a series of intercompany transactions. Although Kompania Piwowarska disputes the findings and has announced that it will challenge the decision in court, it has already paid PLN 512 million (EUR 120m) in back taxes and interest to the state budget.
2. Withholding tax has recently become one of the tax authorities’ key areas of focus. Experts confirm that companies with international group structures should exercise particular caution. The Kompania Piwowarska case shows that KAS is examining dividend structures within multinational groups with increasing rigor and consistency. Even widely used exemptions may be challenged if the authority concludes that a given structure lacks genuine economic substance.
3. Tax authorities are analyzing so-called beneficial owners and scrutinizing the actual activities of companies. Increasingly, dividend exemptions are being questioned when funds are swiftly passed on to entities outside the EU or the European Economic Area. In such cases, the tax authority may deem the structure “artificial” and assess a 19% tax, along with interest.