Poland: A new chapter in the government’s tax offensive. Significant modifications to key regulations aim to further optimize the tax system.
As part of the ongoing campaign aimed at optimising the tax system and increasing tax revenues, the Polish legislator is introducing a new bundle of systemic solutions. By the end of 2018, a comprehensive amendment to the PIT, CIT and general tax ordinance acts was passed, which introduces a number of new regulations. The first provisions of this resolution have just come into force.
A new chapter of the Tax Ordinance introduces extensive reporting obligations to tax authorities of tax schemes, i.e. solutions aimed at tax benefits (so-called MDR, Mandatory Disclosure Rules). This is a response to Council Directive (EU) 2018/822, which aims to combat aggressive tax optimisation practices by introducing reporting obligations, as well as by improving exchange of information between EU countries.
The new regulations impose an obligation to report not only on advisers (e.g. tax, legal, bank employees), but also on entities and persons using/benefiting from tax arrangements. The scope of the new provisions goes partly beyond the requirements of Directive 2018/822 in that they cover not only cross-border schemes but also domestic schemes, while the reporting obligation applies partly retrospectively. Evading these obligations may result in imposition of penalties of up to PLN 2 million.
In addition to the MDR, an exit tax has also been introduced, i.e. a tax related to the transfer of a taxpayer’s tax residence outside Poland. This applies both to companies and individuals.
Other new solutions include, for example:
– special regulations governing taxation of income from virtual currencies,
– preferential taxation of income generated by intellectual property rights,
– arrangements for the acquisition of debt portfolios,
– an alternative way of taxing the issue of Eurobonds,
– changes in transfer pricing rules,
– limiting the possibility of issuing individual interpretations with regard to anti-avoidance provisions and changes in the provisions of the protective force of general interpretations and tax explanations in cases of tax avoidance.
Due to controversies and uncertainties related to the new regulations, the Ministry of Finance is currently drafting extensive explanations to all new regulations. Publication of the explanatory notes is scheduled for mid-2019.
Source: Act of 23 October 2018 amending the Personal Income Tax Act, the Corporate Income Tax Act, the Tax Ordinance Act and certain other acts