Poland-India DTAA (Avoiding Double Tax for Indian Investors)

Indian residents increasingly use Paasa to hold Polish equities such as CD Projekt, PZU, PKO Bank Polski, or broad Poland ETFs like WIG20 trackers. Dividend income from these holdings is paid in Poland and reported in India, which creates confusion about who taxes what and how to avoid paying twice.

The India–Poland Double Taxation Avoidance Agreement solves this by ensuring your cross-border equity income is taxed only once. This guide explains how the treaty works for dividends, interest from Poland-domiciled bond ETFs, and capital gains, and how Paasa helps you get the 10% treaty rate applied at source or corrected if over-withheld, then file Form 67 in India so your post-tax returns reflect a single effective tax.

Table of Contents

• What is Double Taxation
• Understanding the India–Poland DTAA
• Residency Rules under DTAA
• Source vs Residence (Who gets to tax what)
• How DTAA Applies to Dividends, Interest & Capital Gains
• How to avoid double taxation?
• Example 1: Interest Income
• Example 2: Dividend Income
• Common Mistakes Investors Make
• Conclusion
• FAQs

What Is Double Taxation?

When you earn income in one country but live in another, both countries try to tax the same income. This overlap is double taxation.

Example: You are an Indian resident investing in Polish stocks or equity ETFs through Paasa.

• Poland withholds 19% on dividends at payout.
• When you file your return in India, you must declare that same income again because India taxes global income.
• Without relief, you would pay both taxes in full, once in Poland and again in India.

The Double Taxation Avoidance Agreement (DTAA) prevents this by setting limits on tax at source and letting you claim credit in India for tax already paid abroad. For Poland, the payer applies the treaty rate of 10% when you provide a valid Indian Tax Residency Certificate. If 19% was withheld, you file a refund claim in Poland to bring it down to the treaty rate.

With DTAA, Poland takes 10% and India gives you a Foreign Tax Credit for that 10% via Form 67. The result is one effective layer of tax, your Indian rate, not two.

Note: Paasa helps investors get the treaty rate at source with TRC paperwork or file a refund if 19% was taken, and guides Form 67 filing so foreign income is taxed only once.

What is the India & Poland DTAA Treaty?

The India–Poland Double Taxation Avoidance Agreement makes sure the same income is not taxed twice, once where it is earned (the source country) and again where the investor lives (the residence country).

For Indian residents earning dividends from Polish stocks or equity ETFs via Paasa, this treaty keeps your total tax fair and compliant. Poland deducts tax first; the treaty and India’s credit rules ensure you do not pay twice.
While the DTAA covers many income types, this guide focuses on market income relevant to investors:

• Dividends from Polish shares and equity ETFs
• Interest from Poland-domiciled government bonds and bond ETFs
• Capital gains on listed shares and ETFs

In simple terms, the DTAA works through two mechanisms:

1. Allocating taxing rights: it defines which country has the primary right to tax each category of income, for example dividends, interest, and capital gains.
2. Granting relief: if both countries tax the same income, your country of residence (India) allows a tax credit for tax already paid abroad.

With Poland, the payer generally applies the treaty rate at source when you provide a valid Indian Tax Residency Certificate. If 19% was withheld on dividends or 20% on interest, you correct it with treaty paperwork and a refund or reclassification, then India gives credit for the tax that ultimately remains.

You can read the official India–Poland DTAA text on the Government of India’s website here.

For a practical investing workflow for this market, read Invest in Poland from India.

Residency rules under DTAA

The treaty’s first step is to decide where you are a tax resident. If you are considered a resident in both India and Poland during a financial year, the DTAA uses a tie-breaker to pick one country for treaty purposes.

For example, if you live in India but spend significant time in Poland, the tie-breaker decides which country will treat you as its resident for tax purposes. It follows a clear sequence:

• Permanent home: where you have a fixed home available.
• Centre of vital interests: where your personal and economic relations are stronger.
• Habitual abode: where you stay more frequently.
• Nationality: if still unresolved, the country of citizenship applies.
• Mutual agreement: in rare cases, both tax authorities mutually decide.

Understanding residency is crucial because DTAA benefits apply only to residents of one of the treaty countries. For most Indian investors earning Polish market income such as dividends or capital gains, India is the country of residence and Poland is the source country.

Source vs Residence (Who gets to tax what)

The treaty divides taxing rights between the country of source (where the income arises) and the country of residence (where you live and file taxes).

Here’s how it works for income types relevant to Polish equities:

Type of Income	Taxed in Source Country (Poland)	Taxed in Residence Country (India)
Dividends	Yes. Withheld at 19% when paid, then reduced to 10% when the treaty rate is applied or by refund.	Yes, with credit for Polish tax that remains after the treaty rate.
Interest	Yes, when distributions are classified as interest (for example, from Poland-domiciled bond ETFs or funds). Domestic 20% at payment; reduced to 10% with DTAA.	Yes, taxed in India with foreign tax credit for the 10% Polish tax that remains.
Capital gains from sale of shares or securities	Yes. Poland taxes gains on Polish-resident company shares and Poland-domiciled ETFs at a flat 19%.	Yes.
Employment income	Taxed in the country where services are rendered. Short-stay exceptions can apply.	Yes, if you are tax-resident in India. Foreign tax credit may apply if also taxed in Poland.

How DTAA Applies to Dividends, Interest & Capital Gains

When Indian investors earn income from Polish assets such as stocks or equity ETFs, Poland deducts tax at source before paying out. This is called withholding tax, and by default it is 19% on dividends and 20% on eligible Poland-source interest.

However, under the India–Poland Double Taxation Avoidance Agreement, this burden reduces. You give the payer a valid Indian Tax Residency Certificate to apply the treaty rate of 10%, and then you claim a foreign tax credit in India for tax already paid abroad. Let’s see how it works for the most relevant income types:

Dividends

• By default, Poland withholds 19% on dividends paid by Polish companies.
• Under the DTAA, when the treaty rate is applied for India-resident beneficial owners, the rate is 10%.
• The balance Indian tax is paid in India, with a credit for the 10% Polish tax that finally remains.

	Polish Dividend Withholding
At payment (statutory default)	19%
After DTAA application or refund (India resident, beneficial owner)	10%

Note: For most Paasa investors, the final Polish rate is 10% after treaty paperwork. If 19% was taken, the excess is corrected through the payer or a refund. The same 10% can be claimed as a foreign tax credit in India via Form 67.

Interest

Interest income from ETF distributions classified as interest and bond coupons faces a 20% Polish withholding at source by default.

Under the DTAA, for individual investors the treaty rate is 10%. Relief is by applying the treaty rate at source or by refund. You reclaim the excess Polish tax so the final rate is 10%.
Example: You receive PLN 30,000 in Poland-source interest this year.

• Poland withholds PLN 6,000 (20%).
• After treaty application or refund, Polish tax that finally remains is PLN 3,000 (10%).
• In India, at a 30% slab, tax on this interest is PLN 9,000.
• You claim foreign tax credit of PLN 3,000 for the Polish tax that finally remains.
• You pay the balance PLN 6,000 in India.
• Total tax = PLN 9,000 (your Indian rate), not 30% plus 20%.

	Poland Interest Withholding Tax Rate
No treaty paperwork at payment (default)	20%
DTAA rate applied or refund completed (India tax resident, beneficial owner)	10%

Note: For most Paasa investors who are individuals, expect 20% at payment if paperwork is missing, a correction down to 10%, and a matching foreign tax credit in India via Form 67.

Capital Gains

Under the India–Poland DTAA and Polish domestic rules, gains from selling shares of a Poland-resident company or units of Poland-domiciled ETFs are Polish-source. Poland taxes these gains for individuals at a flat 19%. India also taxes the same gain; you claim a Foreign Tax Credit in India for Polish tax actually paid by filing Form 67 on time.

• Poland: 19% on gains from Polish-resident shares and Poland-domiciled ETFs. If taxable in Poland, file PIT-38.
• India: Report the gain in your return and claim FTC for the Polish tax actually paid, limited to Indian tax on that income.
• Indian rate guide: Long-term capital gains on foreign shares held for more than 24 months are taxed at 12.5% without indexation. Short-term gains held for 24 months or less are taxed at your slab rate.

Note: If the asset is not Polish-source (for example, an Ireland-domiciled UCITS that invests in Poland or most ADRs), Poland does not tax at investor level. Only India applies.

How to avoid double taxation?

Once both countries have exercised their taxing rights, the DTAA gives you relief through India’s Foreign Tax Credit (FTC) system under Sections 90 and 90A, read with Rule 128.

Here’s how it works:

• If Poland finally keeps 10% on your dividend or interest and your Indian slab rate is 30%, India allows a credit for the 10% already paid abroad.
• You pay only the remaining 20% in India so that your total equals your Indian rate, not both countries added together.

Note: Paasa helps streamline this flow with clear income summaries, payer documentation, and ready-to-file Form 67 figures so every rupee earned abroad is taxed only once.

Example 1: Interest income

Imagine an Indian investor holding units of a Poland-domiciled bond ETF. The fund pays interest-type distributions periodically.

• When those distributions are paid while the person is living in India, Poland withholds 20% at source by default.
• Under the India–Poland DTAA, the final rate for individuals is 10% if you provide a valid Indian TRC and you are the beneficial owner. The payer applies 10% or you correct by refund.
• Since the person is an Indian tax resident, India also taxes that same income as part of global earnings.
• Under the DTAA, the individual can claim a Foreign Tax Credit in India for the 10% Polish tax that finally remains.
• Effectively, they pay only the difference in India if India’s rate is higher, not the full amount twice.
• Example: Suppose an Indian investor receives PLN 30,000 of distribution income from the Polish bond ETF this year while living in India.

Paasa’s role:

• We guide investors through payer paperwork to reach the 10% treaty rate and prepare ready figures for Form 67 so the FTC is claimed correctly in India.
• We keep distribution breakdowns and Polish tax vouchers organized, reducing source-tax drag and protecting long-term returns.

Example 2: Dividend income

Imagine an Indian investor holding shares of a Polish company or units of a Poland-domiciled equity ETF. The fund pays cash dividends.

• When those dividends are paid while the person is living in India, Poland withholds 19% at source by default.
• Under the India–Poland DTAA, the final rate for individuals is 10% if you provide a valid Indian TRC and you are the beneficial owner. The payer applies 10% or you correct by refund.
• Since the person is an Indian tax resident, India also taxes that same income as part of global earnings.
• Under the DTAA, the individual can claim a Foreign Tax Credit in India for the 10% Polish tax that finally remains.
• Effectively, they pay only the difference in India if India’s rate is higher, not the full amount twice.

Example: Suppose an Indian investor receives PLN 30,000 of dividends this year while living in India.

Paasa’s role:

• We guide investors through payer paperwork to reach the 10% treaty rate and prepare ready figures for Form 67 so the FTC is claimed correctly in India.
• We keep dividend breakdowns, IFT-1 or IFT-1R, and Polish tax vouchers organized, reducing source-tax drag and protecting long-term returns.

Common Mistakes Investors Make

Even seasoned investors slip up when managing Polish equity income across two tax systems. These are not about intent, just clarity. Here are the most common ones to avoid:

Assuming Polish withholding is automatically adjusted in India
Polish tax deducted at payout does not sync with Indian filings. You must get the treaty 10% applied at source or corrected by refund, then claim the credit in India via Form 67.

Skipping Form 67 submission
Missing Form 67 can forfeit your Foreign Tax Credit, even when Polish tax was correctly reduced to 10%.

Not reporting foreign assets in Schedule FA
Every overseas brokerage account and security must be disclosed in your Indian return. Non-disclosure can trigger scrutiny later.

Confusing inheritance or wealth matters with double taxation
The India–Poland DTAA covers income taxes only. Polish inheritance and gift taxes are separate. Do not mix these with dividend or interest withholding and FTC.

Forgetting the treaty mechanics on dividends and interest
Poland withholds 19% on dividends and 20% on interest by default. Under the DTAA, you get to 10% with TRC and a beneficial owner declaration, then claim FTC in India for that 10%.

Claiming credit for the wrong amount
You cannot claim FTC for amounts that were over-withheld before correction. Credit only the 10% that finally remains in Poland, capped by Indian tax on that income.

Relying on W-8BEN for Poland
W-8BEN is a U.S. form. It does nothing in Poland. Use your Indian TRC, Form 10F details if needed, and the payer’s BO declaration instead.

No proof of Polish withholding
Keep the payer’s certificate and the non-resident information form IFT-1 or IFT-1R, plus broker statements. You need these for refunds and for FTC in India.

Conclusion

The India–Poland DTAA ensures Indian residents earning from Polish equities pay tax only once on their global income. Getting the 10% treaty rate at source on dividends and interest and claiming credit in India with Form 67 keeps you compliant and protects post-tax returns.

About Paasa

Paasa is the Indian investor’s gateway to compliant global investing. Trusted by HNIs, family offices, and professionals with overseas income, it helps you build exposure to markets across the U.S., Europe, Japan, and more.

What sets Paasa apart is its India-first compliance layer for cross-border investors:

• FEMA, LRS, and DTAA alignment built into every transaction and cash flow.
• Built-in tax analytics and reporting for Indian residents investing abroad, covering LTCG, STCG, dividend taxes, and TCS tracking.
• End-to-end support for remittances, reconciliation, and tax-credit documentation such as Form 67.

Whether you invest in U.S. equities, UCITS ETFs, or curated global equity strategies, Paasa gives you one transparent platform to keep your portfolio aligned with India’s tax and regulatory framework.

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• Invest in Japan from India
• Invest in Singapore from India
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• Invest in Poland from India
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Disclaimer

This article is for information only and is not investment, tax, or legal advice. It draws on public sources and our understanding of current regulations, which can change. Investing in global markets involves risks, including currency risk, political risk, and market volatility. Past performance does not predict future results. Please seek advice from qualified financial, tax, and legal professionals before acting.