A bill amending the CIT Act has been signed by the President into a law which does away with the requirement for income tax groups and the largest payers of the corporate income tax (CIT) to prepare and publish tax strategy reports. The new law will take effect the day after it is published in the Journal of Laws.

Below you will find some practical notes regarding the new law’s compliance impact on taxpayers that previously fell within the ambit of these regulations.

  1. Simplified reporting duties
  • The largest taxpayers (e.g. large taxpayers with annual income of more than the equivalent of EUR 50 million) and income tax groups are exempt from the time-consuming and costly duty to prepare, approve and publish annual tax strategy reports.
  • There will no longer be any need to disclose details of your tax policies, reportable arrangements, related party transactions, transactions with tax havens etc.
  • The law also abolishes the duty to report such information to tax authorities.
  1. No penalty for failure to publish
  • Any proceedings concerning monetary penalties for failure to publish a tax strategy will be discontinued if its publication deadline falls before the effective date of the amending act.
  • In addition, the new law provides legal assurance regarding the absence of any such penalties in future.
  1. Impact on compliance and risk management policies
  • The abolition does not exempt taxpayers from having to keep an adequate tax and risk management policy.
  • While no longer required, internal tax strategy procedures and documentation will remain important, particularly in the context of tax audits and relations with tax authorities.

You will therefore find it worthwhile to maintain the internal tax management processes you have already developed, even if tax strategy reports no longer have to be prepared or published.

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

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