Ministry of Finance plans that in January 2019 successive changes in income taxes will enter into force, which are included in the so-called ATAD Directive. This is Directive 2016/1164 of 12 July 2016, laying down rules to counter tax avoidance practices which have a direct impact on the functioning of the internal market.
A large part of the provisions contained in the Directive have already been introduced into Polish tax laws under a large amendment which has entered into force 1 January 2018 At the moment work is underway on a bill implementing its next provisions.
Exit tax
We are talking about exit tax or tax on unrealised capital gains. The definition of this tribute can be found in Article 5(1) directives. That provision provides that the taxable person is subject to tax in the amount equal to the market value of the assets transferred (at the time of their transfer), less their value for tax purposes. This tax will arise when:
(a)
the taxpayer transfers assets from its head office to a permanent establishment in another Member State or in a State third, if the home Member State no longer has the right to tax the transferred assets due to the transfer;
(b)
the taxpayer transfers assets from its permanent establishment in a Member State to its head office or other permanent establishment in another Member State or in a State third, where the Member State of the permanent establishment no longer has the right to tax the transferred assets due to the transfer;
(c)
the taxable person transfers his tax residence to another Member State or country third, excluding assets that are actually linked to a permanent establishment in first the Member State;
(d)
the taxable person moves the business carried out by his permanent establishment from one Member State to another Member State or to a Member State third, where the Member State of the permanent establishment no longer has the right to tax the transferred assets due to the transfer.
A taxpayer carrying out a transfer of assets or a tax residence to an EU Member State or to a State party to the Agreement on the European Economic Area will be able to benefit from a deferred tax payment through the distribution of instalments for at least a period of time. five years.
Naturally, the directive defines situations when the payment of taxes will cease to apply and the taxpayer will have to regulate it in its entirety.
This is to counter the situation when a taxpayer transfers assets to another Member State and then divests the undertaking, transfers assets outside the EU and the EEA, declares bankruptcy or stops paying instalments in time.
The EU seeks to maintain Member States' fiscal sovereignty
Similar solutions already exist in other EU countries, but the current policy of European Union bodies requires Member States to implement these solutions more quickly also in other EU countries.
This is explained in the preamble to the directive, which states that “the current political priorities for international taxation indicate the need to ensure that taxes are paid where profits and value are generated.
It is therefore necessary to restore confidence in tax systems as fair mechanisms and to enable governments to effectively maintain tax sovereignty."
The draft amendment is not yet known. However, it can be assumed that the Government, together with this amendment, will introduce a number of detailed rules governing this issue, which are intended to prevent tax avoidance.
Author:
Mikołaj Stanisławski
From 2017 Associated with Russell Bedford Poland. In 2007 graduated from the Faculty of Law and Administration of the University of Warsaw. In years 2008-2011 he made an attorney's application. From 2011 entered on the list of lawyers at the District Bar Council in Warsaw. In 2016 He graduated from the Postgraduate Tax Studies and Tax Law of the University of Warsaw. Specializes in tax and tax matters.