On 7 October 2022, the lower house of Polish Parliament (Sejm) enacted a law to amend the Corporate Income Tax Act and certain other acts (“Amending Act”). On 10 October 2022, the Amending Act was transmitted to the President for signature.

Once the new law is promulgated, taxpayers will see various favourable changes:

  • Article 11o(1a) and 11o(1b) CIT Act is repealed with retroactive effect as of 1 January 2021. Taxpayers are no longer required to check if the other parties, whether related or unrelated, to their transactions had any “settlements” with entities based in tax havens. This repeal is a success that ends the nearly two years of discussions on how taxpayers would be disproportionately burdened comparing to any benefit the National Revenue Administration would get from the new disclosures.
  • Higher thresholds under Article 11k(2a) CIT Act which trigger the requirement to prepare TP documentation for direct transactions with tax havens. The previous threshold of PLN 100,000 is increased to:
    • PLN 2,500,000 for financial transactions: the receipt or grant of funding from or to a haven-based entity will need to be documented if the funding exceeds this new threshold;
    • PLN 500,000 for the other transactions.

These regulations will become effective the next day after they are published. In addition, by Article 22 of the Amending Act, they can be applied to transactions made in the tax year that begins after 31 December 2020 or to transactions commenced after that date. This means the higher thresholds will be available already for TP documentation for 2021.

We have been involved in discussions on the sensibility of the law on indirect transactions with tax havens and emphasised the need for increasing the thresholds for direct transactions. We are glad our involvement contributed to the taxpayer-friendly course the changes have ultimately taken.

If this issue pertains to your business and you are interested in our assistance, please contact us.

This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.