ITR

MDDP The Best Tax Advisory Firm in Poland and the Best Consultancy Firm within the scope of Transfer Pricing in Poland according to a ranking compiled by International Tax Review. more
 

 

10-08-2016
The Parisian Convention against the tax avoidance has been signed and is waiting for the ratification

On 7th of June 2017, Poland had acceded the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. The Convention was signed to facilitate the tax authorities’ activities of the OECD members.

The main purpose of the Convention is to adjust the existing double tax treaties to the standards specified in the BEPS Plan. This program assumes preventing the international tax avoidance without renegotiation and individual changes of particular agreements.

In this area, the Convention includes two kinds of standards – so called minimum standard, the implementation/application of which is compulsory, and guidelines, which are not obligatory.

The amendments to be introduced by the MLC cover four main areas:

1)    Preventing granting of tax benefits of DTTs in inappropriate circumstances,

2)    preventing the avoidance of permanent establishment (PE) status and it’s taxation,

3)    preventing the use of hybrid mismatch arrangements,

4)    improving the dispute resolution mechanism available in DTTs.

The MLC will enter into force after at least five countries-signatories have ratified it. To have these changes applicable, both countries have to reach agreement on the scope of modifications. The Convention must be signed and ratified by both concerned countries.

In relation to Poland, the MLC will apply to, inter alia, France, Luxemburg, Cyprus, Malta, Spain, Denmark, United Kingdom. Currently, there is no agreement with Germany and the Netherlands on the Convention list (the Netherlands did not notify the agreement to be placed MLI with Poland).

 

****

 

Should you be interested in obtaining further information, or would like to discuss the impact of the above changes please contact:

 

Monika Dziedzic     tel. + 48 22 322 68 88

 

or your advisor at MDDP.

 

Files to download
news list