Changes in the MDR – approaching obligations
Important changes affecting MDR reporting
Tax alert (20/2020) | 11 September 2020
On 25 June 2020, in the Journal of Laws was published an amendment to i.a. the Tax Ordinance Act and the Act on the Exchange of Tax Information with other countries, providing in particular for the imposition on intermediaries, beneficiaries and supporting entities of the obligation to report all cross-border tax-planning schemes, if the first activity related to implementation of the tax-planning scheme was performed from 26 June 2018 to 30 June 2020 (even in a situation where the tax-planning scheme has already been previously reported).
The new provisions entered into force, in principle, on 1 July 2020. In addition to the indicated amendment, changes regarding postponement of reporting deadlines were introduced.
Additional reporting / re-reporting of cross-border tax-planning schemes
The amendment imposes on intermediaries, beneficiaries and supporting entities the obligation to report all cross-border tax-planning schemes, if the first activity related to its implementation was carried out in the period from 26 June 2018 to 30 June 2020:
- for the intermediary the deadline for such reporting is 31 December 2020,
- for the beneficiary – 31 January 2021,
- for the supporting entity – 28 February 2021.
The above reporting - as well as any "current" reporting of tax-planning schemes from the beginning of July this year must be performed according to the new XML schema.
This means the necessity to re-report the above tax-planning schemes based on the new schema, as well as in practice, to impose a new obligation on supporting entities to retrospectively “re-report” tax planning schemes, implementation of which began from 26 June 2018 to 31 December 2018.
In cases when more than one entity is obliged to provide information on the cross-border tax-planning scheme, the implementation of which began from 26 June 2018 to 30 June 2020, and information about this tax-planning scheme has already been reported by 30 June 2020, the obligation to re-report should be executed by “the entity, who previously provided this information to the Chief of the National Fiscal Administration”.
New MDR reporting deadlines
In the light of the new provisions, reporting deadlines have been extended for both 'domestic' and cross-border tax-planning schemes:
- Domestic tax-planning schemes: the reporting deadline has been suspended "until the 30th day following the date of cancellation of the epidemic danger state and the epidemic state announced in connection with COVID-19";
- Cross-border tax-planning schemes:
- The retrospective reporting – the deadlines for re-reporting / additional reporting of such tax-planning schemes have been extended (as mentioned above): until the end of December 2020 for intermediaries, until the end of January 2021 for beneficiaries, and until the end of February for supporting entities, and the deadline for MDR-4 reporting for such schemes - until the end of April 2021,
- MDR-1 and MDR-2 other than retrospective: deadlines for reporting of cross-border tax-planning schemes start running from 1 January 2021, if the event triggering the reporting obligation took place until 31 December 2020 (unless the reporting deadline expired before 31 March 2020),
- MDR-3: the deadline for reporting has been extended until 30 April 2021, if until 31 December 2020, the beneficiary performed any activities being a part of the cross-order tax-planning scheme or obtained a tax benefit resulting therefrom (unless the reporting deadline expired before 31 March 2020),
- MDR-4 other than retrospective: the deadline for reporting has been extended until 30 April 2021, if the cross-border tax-planning scheme was made available until 31 December 2020 (unless the reporting deadline expired before 31 March 2020).
Specific powers of attorney regarding MDR
The new provisions provide for sorting out the issue of specific powers of attorney (POAs) regarding MDR – from 1 July 2020 the specific POAs to act in matters within the scope of reporting of tax-planning schemes (MDR), authorize also to act in other matters of the same scope, unless otherwise stipulated in the POA (this is intended to eliminate doubts regarding the necessity to submit a separate POA for each separate MDR reporting). In addition to the above, the specific POAs regarding matters within the scope of MDR reporting, submitted and unrevoked by 30 June 2020, shall be transformed to the abovementioned specific powers of attorney to act in matters within the scope of MDR reporting.
Mitigation of requirements regarding MDR-3’s signing
As a result of the entry into force of the new regulations, the circle of persons authorized to sign MDR-3 information has also changed. As from 1 July 2020, this information shall be signed by:
- a natural person – in the case the taxpayer is a natural person,
- a person authorized by a foreign entrepreneur to represent him in a branch – in the case the taxpayer is a foreign entrepreneur having a branch operating in the territory of Poland,
- a person authorized to representation – in the case of other taxpayers
– however the information still cannot be signed by a proxy.
Of course, we will gladly support you in the analysis and fulfillment of obligations related to the amendment of MDR provisions.