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Withholding tax on interest in Europe: What non-resident companies need to know for better compliance | Infographic

March 12, 2025

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.

Download our infographic as PDF


Who should pay attention?

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.


Withholding tax on interest: Country-by-country comparison

What is the general withholding tax rate introduced by your local tax legislation on taxation of interests paid to tax non-residents? 

CZECH REPUBLIC

General withholding tax rate
15%

%
Maximum withholding tax rate
35%

%

HUNGARY*

General withholding tax rate
15%

%

* For the max. withholding tax rate, a Hungarian taxpayer must apply a corporate income tax base increasing item

POLAND

General withholding tax rate
15%

%
Maximum withholding tax rate
15%

%

ROMANIA

General withholding tax rate
16%

%
Maximum withholding tax rate
50%

%

SLOVAKIA

General withholding tax rate
19%

%
Maximum withholding tax rate
35%

%

UKRAINE

General withholding tax rate
15%

%
Maximum withholding tax rate
15%

%

When is the maximum withholding tax rate applicable?

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.

Did your local tax legislation introduce a special requirement for the application of withholding tax exemption on interest payments to EU tax residents except for the rules defined by the EU Interest & Royalty Directive?

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

Does your local tax legislation impose specific reporting obligations in relation to the interest payment made to non-resident entities?

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.


Why it matters: More than just a tax rate

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.


Simplify tax challenges with a trusted advisor

At Accace, we have vast experience with solving tax challenges and compliance across various countries. Our services include:

  • Tax advisory: Offering guidance on direct and indirect taxes, tax optimization, and regulatory matters.
  • Tax compliance: Handling tax registrations, returns, and ensuring adherence to local tax laws.
  • International tax planning: Developing tax-efficient structures and strategies for cross-border operations.
  • Transaction support: Providing due diligence and assistance with mergers, acquisitions, and corporate restructuring.

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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