The tax circumvention clause in the Polish tax system has been in force for over a year. At this time we can observe first examples of a practical approach by tax authorities to the application of some of its provisions.
The most common example of the application of the clause is the provision of provisions on the refusal to give an interpretation of individual tax rules. In their view, it is justified to believe that elements of the facts or future events constitute tax avoidance.
These refusals included issues such as the effects of the company's transformation, the effects of the aport and the consequences of the donation.
As a consequence, they also appeared first the decision of the Provincial Administrative Courts concerning, in most cases, the challenge of the provisions on refusal of interpretation. The courts confirm that the authority issuing the individual interpretation is not entitled to comment on whether a clause procedure will be applied in a particular factual situation.
Moreover, on the day 16 December 2016 a refusal has been given to issue a hedging opinion on merger transactions. A number of arguments contained in this document give guidance to the tax authorities' understanding of the clause.
The Minister of Finance and Development considered the actions in the presented event to be one a sequence of activities within the meaning of the clause.
However, referring to the purpose of the activity, the Minister divided the activities into different stages, referring separately to their business objectives and not to the course of the activity as a whole. This action may raise doubts from the perspective of the clause.
From the content of the refusal, it can be concluded, inter alia, that tax authorities attach importance to the amount statement of tax and non-tax benefits resulting from the activity in question for the purpose of assessing whether the operation was carried out primarily in order to achieve the tax advantage.
The tax authorities' actions require them to look closely at the mechanisms used by entrepreneurs in their activities. The current clause requires an in-depth analysis of the activities of entrepreneurs who are exposed to numerous controls by tax authorities in order to establish the correctness attributed to the taxpayer.
A taxpayer who fails to ensure that the legal structure is adapted for its economic purposes may be exposed to the determination of the tax effects in a way different from those which he actually founded.