As of 1 January 2019, obligations to report tax schemes to tax authorities were introduced in Poland (Mandatory Disclosure Rules – MDR).
The concept of a tax scheme has been shaped very broadly, and also using vague and ambiguous concepts. In practice, there are a number of doubts as to whether actions taken by taxpayers constitute a tax scheme and whether they are subject to mandatory notification to the Head of the National Tax Administration. Please note that under certain conditions, the tax scheme may include payment of dividends abroad, sale of a company, liquidation of a partnership or even purchase of real estate.
The violation of the MDR’s obligations was subject to very high sanctions (a fine of up to PLN 25 million).
Additionally, a requirement was introduced, according to which companies which are so-called promoters (or employ promoters), whose revenues or costs exceeded PLN 8 million in the year preceding a given financial year, are obliged to implement a procedure to counteract failure to satisfy the obligation to file information on tax schemes under the threat of an administrative sanction of up to PLN 2 million.
In practice, any larger entity should have such a procedure – in particular if it operates within a capital group and provides legal or tax services to other companies in the group (either through its own legal and tax department or by acquiring such services from external entities).
We are experts in reporting on tax schemes. We train legal advisors, tax advisors, auditors, notaries and accountants on this subject. We are authors of a book in which we have comprehensively worked out this issue (from the perspective of notarial practice).
We identify potential tax schemes for our clients, conduct trainings and prepare procedures to minimize the risk of failure to satisfy MDR obligations. This helps to secure the management boards of companies against possible liability in this scope.
Contact: dr Michał Wilk, Jakub Wirski