MDR legislation entered into force on 1 January 2019, raising a lot of doubt. one of the basics is what the scope of reporting is. We're giving you a heads-up.
The rules entered into force 1 January 2019 (In Section III of the Act Tax Ordinance a new Chapter 11a – Information on tax schemes is added). In Poland, in practice, all tax schemes that meet the criteria laid down in the Act will be reported (including national schemes and those that do not constitute aggressive tax optimization).
A tax scheme is an arrangement that meets certain criteria, the arrangement being an act (legal, factual, other) or a combination of related activities, including a planned activity or a set of planned activities, of which at least one party is a taxable person or who has or may have an influence on the formation or failure of a tax obligation (e.g.
an agreement is not a legal opinion received from the promoter and an act commented on in the opinion). Specific under Article 86a(1)(16) Tax Ordinance the condition relating to the existence of a party to the arrangement as a taxable person is functional.
It will be implemented if at least one party to the activity concerned is a taxable person of a particular tax and at the same time this activity concerns that party acting as a taxable person of that tax in a given arrangement (or potentially could affect the formation or failure of a tax obligation including tax).
This means that the definition of the arrangement will not be fulfilled even though the party to the activity is a taxable person of a tax, if that activity does not concern and cannot, by its nature, concern.
There is no restriction on the types of MDR regulated taxes
There is no restriction on the types of taxes regulated by MDR. Tax schemes on direct taxation, indirect taxation (VAT, excise duty) and so-called local taxes, such as property tax, and other arrangements governed by tax law, will therefore be transmitted.
The provisions of the MDR are not subject to customs duties (they are not subject to regulation Tax Ordinance).
Where the arrangement concerns only value added tax, including goods and services, or excise duty, no cross-border criterion will be met.
Non-reporting activities
As a general rule, if they do not include recommendations for the customer to undertake specific factual or legal activities, the result of which is to achieve a tax advantage in the future:
- • preparing and assisting in the preparation of tax calculations, declarations, information and tax returns,
- • preparing and assisting in the preparation of documentation and applications for licences/authorisations,
- • reviews of tax settlements,
- • preparing and assisting in preparing transfer pricing documentation,
- tax receipts and comments - in terms of tax effects, in which the advisor informs the client about tax consequences and risks arising from existing tax rulings and case-laws concerning transactions or business events already carried out by the client ( past and closed),
- providing advice and support on the introduction of tax procedures by taxpayers to ensure compliance of tax settlements with applicable tax rules and practice,
- providing advice and support for the recovery of overpaid tax liabilities,
- training on existing tax legislation or planned changes to tax legislation (only of an informative nature),
- current tax advisory services,
- support and representation of the client before public administrations, administrative courts, general courts and the Supreme Court,
- support or preparation of statements for tax purposes
- .
Author:
Andrzej Dmowski
Lawyer and Doctor of Legal Sciences of the University of Warsaw. From 2011 one from Corporate Management Partners Russell Bedford Poland. Previously on the BDO advisory network, as well as Deloitte & Touche. Author of the book “Transfer Prices”, co-author of the commentary “The Corporate Income Tax Act”, author of many publications on tax law.