Obligation to prepare tax strategy

Predictions

Obligation to prepare tax strategy

Amendments to the CIT Act

REal Knowledge about the Polish real estate market 1/ 2021

According to the amendments to the CIT Act effective as from 2021 (i) taxpayers whose revenues exceed EUR 50 million in a given fiscal year (e.g. in case of asset sale in SPV), (ii) tax capital groups are obliged to prepare and publish information on the execution of tax strategy.

Taxpayers shall prepare and disclose information including:

  1. approach to processes and procedures aimed to fulfil obligations arising from tax regulations and ensuring their proper execution,
  2. the number of submitted reports on tax schemes (MDR), separately for each tax type,
  3. transactions with related entities the value of which exceeds 5% of the total carrying amount of assets (based on the Statutory Financial Statements),
  4. tax settlements in countries applying harmful tax competition,
  5. restructuring activities planned or undertaken by the taxpayer,
  6. submitted applications for a tax ruling, binding VAT rate information (WIS) and binding excise information (WIA),
  7. voluntary forms of cooperation with the National Fiscal Administration authorities.

The list is not exhaustive and the report itself is to consider the nature, type and size of a given business. Please note that information classified as trade, industrial, professional or production process secrets is excluded from the disclosure obligation.
New regulations impose a fine on taxpayers who do not provide tax authorities with information regarding the website on which their tax strategy is published in the amount of PLN 250k.

The amending bill does not indicate which fiscal year is the first to be reported. However, on 9 December the Ministry of Finance explained that taxpayers were required to prepare and publish information for the year 2020 by 31 December 2021.

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