NEXT WAVE OF DAC6 AND ATAD2 IMPLEMENTATIONS

22 August 2019 saw the publication of a bill designed to amend certain Polish laws for the following purposes:

  • amend the Tax Code and the Tax Information Exchange (Other Countries) Act in relation to the reporting of cross-border arrangements,
  • implement ATAD2 provisions on hybrid structures into Polish CIT Act,
  • make other changes, including new powers of tax authorities and a new targeted anti-avoidance rule.

As regards MDR, the following are among the most important change proposals:

  • Reportable cross-border arrangements will be automatically reported by Polish tax administration to the tax authorities of other Member States and, to a limited extent, to the European Commission within a month from the end of the quarter in which such arrangements were reported to the administration.
  • Helpers will be required to report cross-border arrangements retrospectively if the first step in the implementation of the arrangement was made between 26 June 2018 and 31 December 2018 (unless reported earlier by some other entity required to do so). Such retrospective disclosures were previously required only of relevant taxpayers and promoters.
  • After the Polish tax havens list was extended on the back of the enlarged EU list of non-cooperative tax jurisdictions, the law will require retrospective reporting of cross-border arrangements involving transactions with blacklisted entities from between 26 June 2018 and 31 December 2018.

As an ATAD2 implementation, the CIT Act is to be amended by including new rules on the treatment of hybrid mismatches. The goal is to prevent use of differences between tax systems with regard to the qualification of entities or transactions to cause double deduction of payments, expenses or losses or to cause situations where payments are deducted without at the same time being included in the other party's income.

In addition, it is proposed to amend the CIT Act to include a targeted anti-avoidance rule that would restrict the right to notional interest deduction (CIT Act, Article 15cb) to cases where it is economically justified.

According to the draft, the changes would become effective generally on 1 January 2020, except for some isolated regulations on tax authorities' powers, which would enter into force on the publication date.

If this issue pertains to your business and you are interested in our assistance, please contact your WTS&SAJA consultant or our office.

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This Newsletter 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.

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