The situation
Foreign supplier invoices and contracts, uploaded before a payment run
A Wrocław manufacturer, part of a Czech group, pays about forty foreign invoices a month. This week’s batch includes a management fee from the Prague parent, an advertising campaign run by a Brno agency and a software licence from a Czech developer. Treasury releases payments on Friday and wants to know which ones need tax withheld.
The withholding rule itself is short. The work is in the classification: is the fee one of the listed services, is the software payment a royalty or something else, is a current certificate of residence on file, and what does the treaty allow. Each invoice is a small research task.
What the research has to settle
The rules behind the answer
- The payer’s law decides first
- Withholding starts with the payer’s country. Polish corporate income tax law lists the payments to non-residents taxed at source, including royalties, interest and a set of intangible services such as advisory, accounting, legal, advertising and management services.
- The treaty then limits the tax
- Under the Poland–Czech Republic tax treaty, business profits of a Czech company without a permanent establishment in Poland are generally taxable only in the Czech Republic. Royalties have their own article, and the research confirms what it allows at source.
- Treaty relief needs paperwork at payment
- To apply the treaty at source, the Polish payer must hold the supplier’s certificate of tax residence and take due care in checking the conditions. Without it, the domestic rate applies, and the payer answers for tax it should have withheld.
- Classification moves the answer
- A software payment can be a royalty for the right to exploit the copyright, or a payment for a copy used in the business. The contract terms decide which, and the treaty article follows from that.
How it runs in azta
From the question to the document
The question, as you would type it
Polish sp. z o.o. paying a Czech s.r.o. with no Polish permanent establishment for a three-month online advertising campaign, and another Czech company for a licence to use and modify its ERP software across the group. Is Polish withholding tax due on either, and what does the treaty change?
You start with
Foreign supplier invoices and contracts, uploaded before a payment run
- 01
Upload the invoices and contracts
Add the batch and the underlying agreements. azta reads them and refers back to the passage it relied on, such as the licence grant or the description of services.
File upload· Pro - 02
Classify each payment
Ask about each supplier in turn. azta cites the Polish corporate income tax act, the treaty with the Czech Republic and the court decisions on similar payments.
Cited research· Free - 03
Read the treaty article
Open the cited provision in the reader to check the wording yourself, in the original language.
Atlas statute reader - 04
Draft the payment note
Ask for a table for treasury: supplier, classification, withhold or not, and the document needed. Edit it in Canvas.
Canvas · Ask azta· Pro You send
A withholding tax check per payment, with the documents needed to apply the treaty
What you get
A withholding tax check per payment, with the documents needed to apply the treaty
Payment note · draft
Foreign payments, week 43: withholding check
Prague parent, management fee. Management services are among the intangible services listed in Polish law. The parent has no permanent establishment in Poland, so under the treaty the fee is taxable only in the Czech Republic, provided we hold a current certificate of residence. The certificate on file is more than a year old: request a new one before release.
Brno agency, advertising campaign. Advertising services are also on the list. The treaty position is the same, and the agency’s certificate of residence on file is current. Pay without withholding and record the payment for the annual information return.
Czech developer, ERP licence. The licence allows modification and use across the group, which points to a royalty rather than a payment for a copy for own use. Withhold at the rate the treaty allows, on the basis of the certificate held. Head of tax to confirm before release.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
21 minutes a month
At €80 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 54
- Capacity at your rate
- €4,320
- More foreign payment checks a quarter
- 13.5
- Return on Pro
- 13.3×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoWhat stays with you
- Collecting certificates of residence and checking they are current.
- The final classification where a contract is ambiguous.
- Releasing the payment and filing the withholding returns.
Frequently asked questions
- Does azta calculate the tax to withhold?
- No. It establishes whether withholding applies and on what basis, with citations. The amount and the filing stay with your team.
- Can it read contracts in Czech?
- Yes. Upload the contract in Czech, Polish or English. azta reads it, refers back to the passage it relied on and answers in your language.
- What about suppliers outside the EU?
- Ask in the same way. azta researches the Polish rules and the treaty with the supplier’s country, and cites each provision it relies on.
