Upon closing public consultations regarding the tax part of the "Polish New Deal" package, the Ministry of Finance announced its amendment bill on which the Sejm will begin work on September 16-17. We present the most important changes that are crucial for companies operating in Poland.
- Changes in PIT and health insurance contributions
- Changes in the field of income taxes (CIT or PIT respectively)
- Amendments to transfer pricing regulations
- Amendments concerning VAT
- Amendments to the Tax Ordinance
- Changes in tax reliefs and incentives
Changes in PIT and health insurance contributions
- Healthcare contributions for sole proprietorships – a fixed contribution scheme for the self-employed will be scrapped. The bill stipulates that healthcare contributions will from now on be assessed as a percentage of the sole proprietor’s income, thereby putting an end to the long era of flat fees. After the original bill received fierce criticism from flat-rate taxpayers, their contribution is now set at 4.9% of their income (down from the original 9%). That said, healthcare contributions cannot be lower than 9% of the official minimum monthly salary. Self-employed contractors electing the progressive tax rate system will now pay healthcare contributions at 9% of their income (by analogy to those employed on an employment contract basis).
- Healthcare contributions no longer tax deductible. Additionally, healthcare contributions will no longer be tax deducible for anyone – employees and self-employed taxpayers included.
- New rules for healthcare contributions paid by sole proprietors paying ‘lump sum’ tax on their registered revenue (Polish: ryczałt ewidencjonowany). Self-employed contractors eligible to pay a ‘lump sum’ tax will pay healthcare contribution on the basis of the average national salary. If their annual income is below PLN 60,000, their healthcare contribution will be at 60% of the official average monthly salary, those with an income of PLN 60,000 – 300,000 will pay 100% of the average monthly salary, and for those making more than PLN 300,000 – 180% of the official average monthly salary.
- Increased tax-free income: from PLN 8,000 to PLN 30,000 (NB: not applicable to flat-rate taxpayers).
- First income tax band raised from PLN 85,528 to PLN 120,000 per annum.
- Introduction of the so-called ‘working middle class tax exemption’ – only taxpayers earning income from a broadly defined employment relationship may claim eligibility.
- The lump sum rates in the lump-sum tax system will be reduced: for medical and technical professions (from 17% to 14%) and for some types of income earned in the IT services sector (from 15% to 12%).
- Changes in private rental – any income from lease, sublease or other forms of tenancy, if earned outside of business activity, will be now taxed exclusively at a fixed tax rate (8.5%, except if this type of income exceeds PLN 100,000 per annum, in which case the rate will be set at 12.5%).
- Taxpayers will no longer be able to depreciate residential buildings and/or flats used for business purposes (or leased or rented).
- New items have been added to the list of assets on which, if sold at a profit after they have been withdrawn from use, income tax will need to be paid.
Changes in the field of income taxes (CIT or PIT respectively)
Introduction of a minimum tax
The bill provides for a new tax, known as ‘minimum income tax’. The main assumptions for the new tax are as follows:
- The tax will be paid by Polish residents (companies and corporate groups) and non-residents doing business via a foreign permanent establishment located in Poland who: (i) incurred a loss from a source of income other than capital gains, or (ii) whose net income represents less than 1% of their gross income (other than from capital gains);
- the minimum income tax rate will be 10% of the ‘tax base’;
- the ‘tax base’ will be the sum of:
- an amount representing 4% of the value of income generated from any source other than capital gains earned by the taxpayer in the tax year,
- the value of deferred income tax obtained as a result of the disclosure in the taxpayer’s tax return of intangible assets not yet subject to amortization to the extent this results in increased gross profit or reduced gross loss; and
- certain categories of costs incurred for the benefit of related parties, including:
- acquisition costs of certain categories of services or intangible rights whose value exceeds 5% of EBITDA on any excess amount over PLN 3 million,
- debt financing costs to the extent they exceed 30% of EBITDA;
- certain categories of entities will be exempt from the obligation to pay minimum income tax (financial companies, startups, and taxpayers with revenues at least 30% lower from those generated in the previous year);
- in certain situations, taxpayers will be eligible for certain tax exemptions and deductions provided for in the Act;
- the amount of the minimum income tax payable will be reduced by the amount of the regular CIT due for the same tax year. It will be possible to deduct the minimum paid income tax from regular CIT within the next 3 consecutive fiscal years.
Changes in withholding tax (WHT)
The most important change proposed is the limitation of the pay-and-refund mechanism only to amounts payable on account of dividends, interest and license fees for the benefit of related entities which are not Polish tax residents. The bill also provides that the pay-and-refund mechanism will apply if it is determined that an amount payable was paid and the said amount was not classified as a payment on account of dividends, interest or license fees receivable without a valid business reason.
Additionally, as of 1 January 2022, it will also be possible to assess the issue of due diligence being observed through the prism of relations (within the meaning of transfer pricing regulations) linking the withholding tax remitter and the taxpayer.
The bill also revises the current definition of ‘beneficial owner’, expressly excluding from this category any "entities obligated" to transfer all or part of an amount receivable to another entity (the current wording refers to "entities obligated in legal or factual terms"). In addition, in assessing whether an entity meets the definition of ‘beneficial owner’ in terms of its actual business activity, it will be necessary to take into account the nature and scale of the entity's operations with respect to the amount receivable received.
As an additional simplification, it will become possible to confirm the taxpayer's place of residence for tax purposes by presenting a copy of a certificate of residence, unless the submitted copy raises reasonable doubts.
The proposed amendments also stipulate that ‘WHT exemption opinions’ will be replaced by ‘preference eligibility opinions’, which are intended also to cover the applicability of preferential treatment under double taxation treaties.
Clarification of rules for determining whether a company has its management board (and thus tax residency) in Poland
The bill provides that a taxpayer is deemed to have its management board in Poland if, among other things, the taxpayer’s day-to-day affairs are conducted in an organized and continuous manner in Poland, in particular on the basis of:
- a contract, decision, court ruling or any other deed governing the establishment or operation of that taxpayer,
- a power of attorney, or
- existing relationships referred to in the transfer pricing regulations.
New rules for tax capital groups (fiscal unities)
The bill liberalizes the rules for the incorporation and functioning of fiscal unities. Namely, more lax solutions have been introduced, including:
- reduced minimum average share capital per each member company forming a fiscal unity – from PLN 500,000 to PLN 250,000;
- fiscal unity will now be allowed to settle up to 50% of losses incurred by the company before the fiscal unity was formed, provided certain conditions are fulfilled, to a maximum of the amount of income from the source of revenue generated by the subsidiary in the fiscal year in respect of which the reduction is made;
- new types of restructuring measures within a fiscal unity will be allowed;
- the following requirements will now be lifted:
- the Fiscal Unity Agreement will no longer have to be executed in the form of a notarial deed (written form will suffice);
- subsidiaries will no longer be prohibited from owning shares in fiscal unity member companies;
- the requirement of a 2% profitability that the income must have in the revenues generated by a fiscal unity.
Changes applicable to controlled foreign companies (CFCs)
With respect to CFC regulations, the bill provides for the following solution:
- the list of entities meeting the definition of a CFC will be extended;
- the list of passive income that defines a CFC will be extended (including from certain intangible services, from leases and similar arrangements, sale of goods or products from or to related parties).
Clarification of the relationship between EBITDA and the PLN 3 million threshold (safe harbor) and the introduction of new restrictions on recognition of certain expenses as tax deductible.
The Ministry of Finance decided to clarify the details of an existing regulation restricting the tax deductibility of debt financing costs. Any excess of debt financing costs over (i) PLN 3 million or (ii) 30% of taxable EBITDA will not be eligible for tax deduction.
In addition, under the bill, the following items will not be deductible as of 1 January 2022:
- costs of debt financing obtained from a related entity to the extent they were used, whether directly or indirectly, for the purpose of equity transactions, in particular: share acquisition or subscription, acquisition of the bulk of rights and obligations of a company that is not a legal person, making additional payments, share capital increases or share buyback for redemption;
- costs incurred by a taxpayer which is a corporation in connection with a service provided by a ‘related entity’ within the meaning of transfer pricing regulations, to that corporation or to a partner (shareholder) of that corporation, as a general rule, if the incurring of that cost constitutes a disguised dividend;
- payments, benefits and other amounts receivable from illegal employment and any remuneration paid to an employee to the extent the employer has not disclosed the remuneration to the competent state authorities;
- contributions paid to the Social Insurance Institution (ZUS) on account of retirement/disability pension and sickness insurance, on any remuneration paid in connection with illegal employment and on a part of unreported remuneration (financed entirely from the payer's own funds) – if illegal employment is confirmed or compensations are found to have been understated.
Changes in Estonian CIT
The bill adds new entities eligible for a lump sum on income generated by corporations (known as “Estonian CIT”), namely limited partnerships, limited joint stock partnerships and simple joint stock companies.
In addition, the bill liberalizes the use of Estonian CIT, which, according to the explanatory memorandum attached to the bill, is aimed at further developing this alternative taxation system. The bill suggests the following changes:
- the lifting of the requirement that a certain threshold of direct investment expenditures must be reached as a condition of eligibility for Estonian CIT;
- the lifting of the upper threshold of annual revenue which, once exceeded, barred taxpayers from Estonian CIT or resulted in a tax surcharge (as a consequence, provisions regulating tax surcharges will be also lifted);
- reduction of Estonian CIT rates to 10% (for small taxpayers and start-ups) and 20% (for other taxpayers), although investment expenditures will not trigger further tax rate reductions;
- more flexible deadlines for paying tax liabilities in connection with ‘preliminary adjustments’ (korekta wstępna), and – taxpayers choosing the lump sum tax system for an uninterrupted period of more than 4 tax years – additionally the abolition of the obligation to pay this tax liability;
- rules being introduced for taxation of net profit if the taxpayer leaves the Estonian CIT scheme and fails to make a one-off settlement; the new rules provide that the tax will be paid only after the profit has been realized;
- increased percentage of tax deduction available to shareholders/partners of corporations using the Estonian CIT scheme from the the lump sum tax on profit distributions made by such corporations.
Restructuring and reorganization
- The bill will curb tax neutrality of such transactions as corporate mergers and de-mergers, in-kind contributions of businesses, and share for share exchanges. Additional conditions to tax neutrality will be introduced. Moreover, under the new regulations, the burden of proof will fall on the taxpayer, not the tax authorities.
- Tightened up exit tax: the bill stipulates that cross-border transformations will also be subject to exit tax. The legislator’s intention was to impose taxes on indirect business transfers outside of Poland, e.g. by way of a merger of a Polish business with a foreign corporation.
Amendments concerning tax depreciation
The draft introduces the rule that depreciation write-offs related to fixed assets included in group 1 of the Classification of Fixed Assets (e.g. residential and non-residential buildings) cannot exceed in a tax year depreciation or amortization write-offs made in accordance with accounting regulations charged in that tax year to the financial result of the entity. In light of the explanatory memorandum to the bill, the purpose of the above rule is to reduce the differences between the taxablencome before income tax reported by a real estate company in a tax year and the gross profit in accounting books (profit before income tax) reported for the same period.
Additionally, the bill eliminates the possibility to make tax depreciation write-offs in respect of residential buildings and apartments.
Tax on so-called “diverted profits”
The draft provides for the introduction of a new concept of taxation of so-called “diverted profits”. Pursuant to the explanatory memorandum to the bill, the provision introducing tthat tax is aimed at eliminating the possibility of obtaining tax advantage through tax schemes designed to transfer income to jurisdictions with a low effective tax rate.
According to the draft, the tax on diverted profits would apply both to Polish residents and non-residents having permanent establishment in Poland and would amount to 19% of the tax base. The tax base would be the fees paid directly or indirectly to affiliated parties for various intangible services, fees for the use of IP rights, transfer of the risk of debtor insolvency, or provision of debt financing. These costs would constitute taxable “diverted profits” only if two conditions are jointly met: the actual level of taxation of the affiliated party (tax 25% lower than the tax that would be paid in Poland) and the share of the amount of the above fees in the revenues of the affiliated entity (at least 50%). In addition, the draft provides for a possibility to reduce the tax on diverted profits by the withholding tax levied in Poland on the remuneration paid to affiliated entities and by the amount compensating for the application by the taxpayer of the limits on deducting as tax deductible costs excess expenditures on debt financing and on intangible services purchased from affiliated parties. The bill introduces a de minimis rule, pursuant to which the tax on diverted profits would not be paid by those taxpayers whose share of costs incurred for intangible services, fees for the use of IP rights, transfer of debtor insolvency risk or provision of debt financing to affiliated and unaffiliated entities in the total amount of costs does not exceed 3%. In addition, provisions on tax on diverted profits would not apply to fees paid to an affiliated party being a tax resident in an EU/EEA country and conducting “material and real economic activity” in that country. Importantly, the bill introduces different criteria for assessing the nature of business activities than those known under the regulations on controlled foreign companies (CFC).
Elimination of “hidden dividends” from the cost base
Under the proposed regulations, a taxpayer that is a corporation will not be allowed to recognize as a deductible expense the costs incurred in connection with a service provided by an entity affiliated with the corporation or a shareholder of that corporation if the cost constitutes a “hidden dividend”. Under the bill, costs constitute a hidden dividend if:
- its amount or the timing when the costs are incurred is in any way contingent on the taxpayer making a profit or the amount of that profit, or
- a reasonable taxpayer would not incur such costs or might incur lower costs if a comparable performance was provided by an unaffiliated party, or
- the costs cover consideration for the right to use assets that were owned or co-owned by the shareholder or an entity affiliated to the shareholder prior to the formation of the taxpayer.
Polish Holding Company
Tax exemption (subject to certain conditions) applicable to 95% of dividends received by a holding company from a domestic or foreign subsidiary (as defined in the proposed regulations).
Tax exemption of capital gains received by a holding company from the sale of shares in domestic or foreign subsidiaries (except real estate companies) to an unrelated party.
Amendments to transfer pricing regulations
With respect to transfer pricing the bill provides for the following amendments:
- extension of deadlines for (i) preparation of local documentation (from 9 to 10 months following the end of the tax year), (ii) submission of local or group transfer pricing documentation at the request of tax authorities (from 7 to 14 days), (iii) submission of transfer pricing information (from 9 to 11 months following the end of the tax year).
- relaxation of the requirements for transfer pricing adjustments - (i) in addition to the trade partner’s statement, accounting evidence confirming that the trade partner made the adjustment may also be used and (ii) the obligation to report the transfer pricing adjustment in the annual return is waived,
- extension of the list of exemptions from the obligation to prepare documentation for, among others, re-invoicing or transactions that meet the conditions of financial and low value-added services safe harbor,
- extension of the list of exemptions from the obligation to prepare a comparative analysis / analysis of compliance, among others for transactions between micro and small businesses and for transactions with entities from tax havens,
- obligation to prepare group documentation for all entities obligated to prepare local documentation, belonging to groups of affiliated entities, consolidating financial statements using the full or proportional method,
- attaching a statement on the preparation of documentation to the TPR form and changing its content (the taxpayer will be additionally obligated to declare that the documentation was prepared in accordance with the actual state of affairs),
- abolition of the obligation to file an ORD-U form for entities that are obliged to submit a TPR form and do not transact with entities from tax havens.
- changes and clarifications in the definitions and the manner of determining the value of transactions - e.g. exercising significant influence also through the participation in the losses of companies and modifications in the financial safe harbor mechanism,
- extension and enhancement of penalties for failure to comply with transfer pricing obligations.
Amendments concerning VAT
Introduction of a solution allowing to maintain neutrality of services between affiliated entities - activities carried out between members of a VAT group will be VAT neutral.
A VAT group will be composed of domestic entities and Polish branches of foreign entities affiliated:
A VAT group will be a new VAT taxpayer (its creation will automatically result in the entities forming the group losing their status as a VAT taxpayer). A VAT group will be represented by one of its members, acting as a representative of the VAT group.
A VAT group is created by concluding an agreement on the establishment of a VAT group (it should, among others, provide for the period for which the VAT group has been established – a minimum 3 years).
An entity will be allowed to belong to only one VAT group. Moreover, it will not be possible to make any changes to the composition of the VAT group during its existence.
Members of a VAT group will be jointly and severally liable for its VAT obligations (both during and after the end of its operation).
Possibility to waive VAT exemption for financial services
The proposed possibility to waive the VAT exemption (option to tax) for financial services (e.g. fund management services, provision of credit or cash loans):
- the option to choose taxation would only apply to the provision of services in the B2B model and to all financial services provided by a given entity;
- the option to opt for taxation of financial services would give the right to deduct VAT on goods and services acquired in connection with business activities.
Proposed conditions for opting for VAT taxation of financial services:
- registration as an active VAT taxpayer;
- written notification to the head of the competent tax office;
- minimum period of taxation of such services - 2 years.
Amendments to the Tax Ordinance
Fiscal Unity (PGK) – dissolution of a Group will no longer solve all problems
Pursuant to the planned amendments to the Tax Ordinance, upon dissolution of a fiscal unity (tax capital group) or its loss of a taxpayer’s status, the companies forming the group will be parties to the proceedings concerning tax liabilities of the group. This means that the tax authorities will be able to determine and enforce potential tax arrears of tax capital groups that ceased to exist, which, in light of the case law of the administrative courts, has not been so far possible. On the other hand, the companies forming a tax group will gain the possibility to recover the tax overpaid by the no longer existing group.
An analogous solution will also apply to companies that formed a VAT group, which has lost its taxpayer status.
Changes concerning VAT groups – MDR and tax rulings (protection also for VAT groups).
The proposed changes in the reporting of tax schemes will only clarify the present issues. The provisions take into account the situation where a beneficiary is a member of a VAT group – solutions in this respect will be analogous to those for beneficiaries being members of tax capital groups.
The protective effects of a tax ruling will also extend to VAT groups, if the ruling has been issued with respect to operations of such a group, at the request of an entity planning to form a VAT group. Consequently, it will be possible to obtain a ruling effective for a VAT group even before it is formed.
Reversing tax avoidance effects (GAAR) – clarifications and new solutions
The proposed amendments provide that only if an application is withdrawn within two months of filing will half of the fee be returned (until now the application could be withdrawn at any time until the issuance of the decision on the same conditions).
The provision regarding refusal to initiate proceedings by the Head of the National Revenue Administration (KAS) in order to determine conditions for reversal of tax avoidance effects has also been clarified (proceedings are not initiated when tax advantages “are” subject to tax proceedings / tax inspection / customs and fiscal inspection). On the other hand, the decision determining the conditions for reversal of tax avoidance effects will not only require the submission of a correction to the return (substitute information), but also justification of the reasons for the correction.
A novelty is to be the possibility of including future cyclical advantages in an application for determination of conditions for reversal of tax avoidance effects in a single proceeding (in such a case the application fee is increased by 35%). Availing oneself of the possibility to reverse tax avoidance effects with respect to cyclical advantages will be subject to a number of conditions in order to safeguard the interests of the tax administration and to ensure the flow of knowledge about the derivation of tax effects by the interested party from a hypothetical factual situation.
It is proposed to exclude the possibility of transferring the entitlement arising from a decision issued with regard to the possibility to revoke tax avoidance effects in terms of cyclical tax advantages to the legal successors of the interested party.
Changes in tax reliefs and incentives
Tax credits for taxpayers supporting sports, cultural activities, higher education and science
The Ministry of Finance has proposed to introduce new tax benefits aimed at encouraging CIT taxpayers to provide more support to entities engaged in sports, cultural activities, higher education and science. The proposed tax benefits mechanism will enable taxpayers earning income from sources other than capital gains income to deduct from their taxable income 50% of deductible expenses incurred for purposes specified in the Act.
Robotization tax relief
Taxpayers will be allowed to deduct from their income 50% of eligible (and exhaustively listed in applicable regulations) deductible expenses incurred (in the period 2022 - 2026, inclusive) for the purpose of robotization, up to a maximum of the amount of income from business activities. This tax incentive cannot be cumulated with tax exemptions available in Special Economic Zones (SEZ) / the Polish Investment Zone (PIZ).
Relief for innovative employees
Deduction of eligible R&D costs not used under the R&D relief in a given fiscal year by reducing PIT advances made on account of remuneration paid to eligible R&D personnel (persons whose working time or service time spent on R&D activities represents at least 50% of their total working time) by the product of unused costs and the income tax rate applicable to the given taxpayer.
Relief on prototypes
Deduction from income (made in the annual tax return) of 30% of total eligible (and exhaustively listed in applicable regulations) costs of trial production of new products (excluding services) and their placing on the market, but not more than 10% of income from business activity. This tax incentive cannot be cumulated with tax exemptions available in SEZ and PIZ.
Improved conditions for R&D Tax Relief
Increasing (from 100% to 200%) the level of deduction under the R&D Relief of R&D personnel payroll costs, incurred by the taxpayer on the basis of employment contracts, contract of mandate or a specific task contract. Increasing the levels of deductions of eligible costs for research and development centers.
Option to combine the R&D Tax Relief and the IP Box
Option to cumulate the R&D Tax Relief and the IP Box by reducing the income from eligible intellectual property rights (IP) taxed at a preferential rate of 5% by eligible R&D costs recognized under the R&D Tax Relief regulations.
Deduction from income of expenses incurred directly to launch an initial public offering (i.e. to prepare an offering prospectus, notarial fees, court fees, stamp duty and stock exchange fees, as well as drafting and publication of announcements and no more than PLN 50,000 for legal fees, as well as tax and financial advisory services) in connection with the intention to apply for admission to public trading on a regulated market or an intention to apply for introduction of these shares to trading in an alternative trading system.
Deduction (up to PLN 250,000) – from income available to taxpayers acquiring shares in a foreign limited liability or joint stock company, provided that the company so acquired is unrelated, has existed for at least 2 years, and conducted identical or supporting activity – of transaction expenses (costs of legal services in connection with the share acquisition, including share valuation (due diligence), taxes directly charged on the transaction as well as notarial, court and stamp duty fees, excluding the cost of the shares themselves and financing costs) You will need to retain ownership of the acquired shares for 3 consecutive years as otherwise the tax base will be increased by the amount of the deduction.
Deduction (up to PLN 1,000,000) from income of 100% of eligible tax deductible expenses incurred in order to boost revenues from the sale of products; the condition for the deduction is that, within two consecutive tax years:
- the taxpayer must increase revenues from the sale of products as compared to the revenues from such sales as determined as at the last day of the fiscal year preceding the year in which the expenses were incurred, or
- the taxpayer must generate revenues from the sale of products not previously offered, or
- the taxpayer must generate revenues from the sale of products not previously offered in the given country.
Revenues from sales on the Polish and foreign markets will be taken into account for the above purpose, but only those made to unrelated entities. This tax incentive cannot be cumulated with tax exemptions available in SEZ and PIZ.
Venture Capital Relief
Personal deduction from income of 50% of expenses spent to acquire (subscribe for) shares in an alternative investment company or a company in which an alternative investment company holds at least a 5% block of shares, provided that such shares are held for at least 2 years, to a maximum of PLN 250,000.
Deduction from income of 50% of eligible Corporate Social Responsibility (CSR) costs – expenses for sport activities, cultural activities or activities supporting higher education and science, but the amount so deducted must not exceed the amount of business income.
Tax credits for returning residents
Exemption from PIT (up to PLN 85,528 per annum, in the next 4 tax years) on revenues generated by a taxpayer moving (after 31 December 2021) his/her tax residency to Poland, if these revenues are earned from an employment relationship, contracts of mandate or business activity.
The exemption will only apply to citizens of Poland and other EU/EEA countries, as well as Swiss nationals and persons holding a Karta Polaka card. It will be available if the taxpayer, before transferring his/her tax residency to Poland, resided in the EU/EEA or certain third countries for at least 3 years or before that period resided in Poland for at least 5 years.
Maximum tax – a lump sum type of taxation for new investors
For persons moving their tax residence to Poland (who have not been Polish tax residents for at least 5 of the last 6 years), there will be a maximum tax of PLN 200,000 on income earned outside of Poland (for a maximum period of 10 years) in exchange for an investment in Poland in a venture of special social significance (at PLN 100,000 per year). Income earned in Poland will be taxed in accordance with standard principles.
Safe return of capital (transitional flat tax rate)
A low-rate flat tax of 8% to be charged on undisclosed income. In addition, if the entrepreneur invests in Poland as much as his/her disclosed income, the 30% of the transitional flat tax will be reimbursed.
Pivotal changes to the Polish Investment Zone
- Tax exemptions to apply only to income earned by the taxpayer directly from a new investment (not to the taxpayer's total income).
- Confirmed option to cumulate the PIZ tax exemption with IP Box.
- Changes in headcount restricted to a maximum of 20%.
Possibility for an entrepreneur (whether foreign or Polish) to conclude a deal with the Polish tax authorities on the tax consequences of a new investment planned or started in Poland with a value of at least PLN 100 million (from 2025 onwards – PLN 50 million), including elements of a tax ruling, GAAR opinion, APA, Binding Excise Information (WIA) and Binding Rate Information (WIS).