11 September 2014 After previous protests by business representatives against the introduction of the "Tax Avoidance Clause", the Ministry of Finance proposed modifications to the draft amendment Tax Ordinance. According to the so-far proposed by the Minister of Finance, the definition of "avoidance of taxation is the application of an artificial legal structure whose main purpose was to obtain, which was not provided for in tax law and which is contrary to the purpose and substance of these provisions, a significant tax advantage by the entity creating or co-creating the artificial legal structure".
Representatives of entrepreneurs stated during the consultation of the draft that the proposed anti-tax avoidance clause was unclear and their doubts were particularly raised by the wording of the "significant tax benefit" contained in the definition of the clause. It is precisely this ambiguity that is to be resolved by the clarification introduced by the MF.
According to the Ministry of Finance, the new MF project assumes that the "significant benefit" is one that exceeds 50,000 PLN unpaid tax per year. As long as the provision enters into force only after a certain quota threshold has been exceeded, the entrepreneur could have problems with the tax office.
In the ministry's intention, the new solution is to prevent unfair tax treatment, which only serves to reduce the tax burden.
Ministry of Finance stated that the limit 50,000 PLN it has been estimated, on the basis of the real costs of using the services of consulting companies, offering the establishment and maintenance of a fictional company abroad, and legal service of the entire tax avoidance scheme.
The Ministry claims that the clause introduces against corporations and wealthy individuals. However, in the opinion of the President of the Association of Entrepreneurs and Employers, it will be used primarily for small and medium-sized companies, which will be more vulnerable in clashing with the tax, than international companies.
In addition, Polish Confederation Lewiatan points out that the definition of a ‘significant tax advantage’ is designed to cover in principle any tax savings leading to a ‘significant improvement in the financial situation’.
With regard to the above-mentioned solution, it should be pointed out that the "tax avoidance clause" in the proposed form is still of a very general nature and may cause significant interpretation difficulties, likely to result in long-term and costly disputes between taxpayers and tax authorities. In view of the above, where the tax authority is not able to contest the solutions that taxpayers have implemented, the State Treasury will also be at risk of significant costs.
Draft amendment Tax Ordinance it is addressed to the Digital Committee and the European Committee and, after their acceptance, to the Standing RM Committee and the Council of Ministers.
The Minister of Finance assumes that the anti-tax avoidance clause will enter into force 1 January 2016.