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Are you applying the right withholding tax on interest? Taxation of interest paid to non-resident entities varies across jurisdictions, with different general and maximum rates applied in each country. There may also be special conditions for exemptions within the EU and specific reporting obligations that must be met.
For businesses operating in Czech Republic, Hungary, Poland, Romania, Slovak Republic, and Ukraine, understanding these rules is key to ensuring compliance and avoiding unnecessary tax burdens.
Our infographic provides a clear comparison of withholding tax on interest across these countries. Explore the details below to stay ahead of tax compliance risks.
Withholding tax on interest impacts businesses involved in cross-border financing, investments, and tax compliance.
This topic is particularly relevant for:
Multinational corporations & holding companies managing intercompany loans.
Investors & financial institutions structuring cross-border financing.
Real estate & infrastructure firms funding developments through foreign entities
Corporate tax & finance teams ensuring compliance and minimizing risks.
CZECH REPUBLIC
HUNGARY*
* For the max. withholding tax rate, a Hungarian taxpayer must apply a corporate income tax base increasing item
POLAND
ROMANIA
SLOVAKIA
UKRAINE
CZECH REPUBLIC
The maximum withholding tax rate is applicable on interest paid to foreign entity residing in jurisdiction with which double tax treaty was not concluded and to foreign entity residing in jurisdiction considered non-cooperative for tax purposes.
HUNGARY
The maximum withholding tax rate is applicable on interests paid to foreign entity residing in jurisdiction considered non-cooperative for tax purposes or in jurisdiction with corporate income tax rate below 9%. Such interest represent an item increasing the tax base; exemption from obligation to increase the tax base may be applied under specific conditions.
POLAND
Pay and refund mechanism; If interest repaid to foreign related entity exceeds PLN 2,000,000 per year, standard withholding tax rate of 20% applies on the excess of PLN 2,000,000, regardless of the right to benefit from more beneficial withholding tax rate or exemption (provided that the tax remitter submitted neither withholding tax statement nor has obtained an opinion on tax preferences from the tax office). A withholding tax refund may be applied for.
ROMANIA
The maximum withholding tax rate is applicable on interest paid to foreign entity residing in jurisdiction considered non-cooperative for tax purposes.
SLOVAKIA
The maximum withholding tax rate is applicable on interest paid to foreign entity residing in jurisdiction with which double tax treaty was not concluded and to foreign entity residing in jurisdiction considered non-cooperative for tax purposes.
UKRAINE
The general 15% withholding tax rate applies.
CZECH REPUBLIC
In addition to the conditions imposed by the EU Interest & Royalty Directive, the company receiving the interest must be granted a decision on withholding tax exemption by the tax office.
HUNGARY
Only conditions imposed by the EU Interest & Royalty Directive must be fulfilled for application of the withholding tax exemption.
POLAND
Only conditions imposed by the EU Interest & Royalty Directive must be fulfilled for application of the withholding tax exemption.
ROMANIA
In addition to the conditions imposed by the EU Interest & Royalty Directive, the company receiving the interest must be granted a decision on withholding tax exemption by the tax office.
SLOVAKIA
In addition to the conditions imposed by the EU Interest & Royalty Directive, the company receiving the interest must be proved as an ultimate beneficiary of this income.
UKRAINE
N/A
CZECH REPUBLIC
Notification on income paid abroad and tax withheld and remitted must be filed with the tax authority within set deadlines. If the exemption from withholding tax applies, no reporting obligation arises in respect of interest payments of less than CZK 300,000 per calendar month to a single creditor.
HUNGARY
Notification on income paid abroad and tax withheld and remitted must be filed with the tax authority within set deadlines.
POLAND
Notification on income paid abroad and tax withheld and remitted must be filed with the tax authority within set deadlines.
ROMANIA
Notification on income paid abroad and tax withheld and remitted must be filed with the tax authority within set deadlines.
SLOVAKIA
Notification on income paid abroad and tax withheld and remitted must be filed with the tax authority within set deadlines.
UKRAINE
Reporting obligation is fulfilled within the annual corporate income tax return filing.
The larger the business, the more complex withholding tax on interest becomes—multiple jurisdictions mean different rates, exemptions, and reporting obligations to track. Missteps can lead to unexpected costs, compliance risks, and cash flow inefficiencies.
Staying informed helps businesses avoid unnecessary tax burdens, ensure compliance with EU and local regulations and optimize cross-border financing structures.
At Accace, we have vast experience with solving tax challenges and compliance across various countries. Our services include:
With years of experience and a proactive approach, our team ensures your company stays tax-efficient, compliant, and ahead of regulatory changes.
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