As of 1 July, the following changes to the rules for reporting tax arrangements shall apply.
Re-reporting of cross-border tax arrangements implemented from 26 June 2018 to 30 June 2020
As of 1 July 2020, the numbers of tax schemes (NTS) assigned to cross-border tax arrangements before that date shall become invalid by virtue of law.
At the same time, promoters, supporters (intermediaries) and beneficiaries (relevant taxpayers) shall be required to re-report cross-border tax schemes if the first activity related to its implementation was carried out in the period from 26 June 2018 to 30 June 2020.
The Ministry of Finance published a regulation postponing the statutory deadlines for the re-reporting of cross-border tax arrangements.
The Regulation requires the cross-border tax arrangements be re-reported respectively by:
- promoters until 31 December 2020
- beneficiaries until 31 January 2021 and
- supporters until 28 February 2021 (the deadline for informing the beneficiary and the promoter that in the opinion of the supporter the reconciliation is a reportable tax arrangement and the deadline for providing the information to the Head of the National Revenue Administration).
Submission of MDR-4 shall also be required.
The obligation to re-report a tax arrangements where more than one entity was obligated shall rest in principle on the entity which previously provided information to the Head of the National Revenue Administration.
The regulation extends the deadline for submitting MDR-3 until to 30 April 2021 if the relevant taxpayer performed any activities that are part of the cross-border tax arrangement or obtained the resulting tax benefit by 31 December 2020.
What is important is that the intertemporal provisions contained in the original text of the Act introducing MDR regulations imposed the obligation to report schemes where the first activity was carried out after 25 June 2018 only on the promoter and the relevant taxpayer.
The provisions of the amendment also extend this obligation to the supporter.
Cross-border schemes provided or implemented from 1 July 2020
For cross-border tax schemes provided or implemented after 30 June 2020, the deadlines shall run from 1 January 2021 if:
- a cross-border tax arrangements was provided, prepared for implementation or the first step related to its implementation was made – this shall concern the deadlines for the promoter and beneficiary;
- the supporter has doubts whether the reconciliation constitutes a cross-border tax arrangement or noticed / should have noticed this fact – this shall concern the deadlines for the supporter;
- the supporter provided support – this shall concern the deadline for the supporter to report a cross-border scheme.
If the promoter or relevant taxpayer ordered the supporter between 1 July 2020 and 31 December 2020 to perform the activities, the obligation to inform the supporter of the tax arrangement number shall expire on 31 January 2021 at the latest.
Change of MDR-3 signing rules
MDR-3 shall be signed by:
- persons authorized to represent the given entity (in accordance with the principles of representation). So far, the regulations imposed the obligation to sign this information on all members of the management board of a legal entity regardless of the manner of representation indicated in the National Court Register. In the case of partnerships, MDR-3 also had to be accompanied by a declaration of partners holding at least a 10% share in the profits of a partnership not being a legal entity, confirming the accuracy of the data contained in this information;
- the person authorized to represent the foreign entity in the Polish branch;
- natural person – if the tax scheme concerns a taxpayer who is a natural person.
However, it shall still not be possible for a proxy to sign this information.
The condition providing for a specific hallmark has been clarified for payments made between related entities to be included in tax deductible costs where the recipient is not resident for tax purposes in any tax jurisdiction or is resident for tax purposes in the so-called “tax haven.”
The new wording of the regulations refers to the recipient having a registered office/management board/place of residence in the country indicated on the list issued by the Ministry of Finance in the form of an implementing act and in the EU list of non-cooperative jurisdictions for tax purposes adopted by the Council of the European Union.
The Ministry of Finance shall also publish a list of such non-cooperative countries and territories which were not included in secondary regulations to the income tax acts by means of an announcement in Monitor Polski [Official Gazette of the Government of the Republic of Poland].
Deadlines for reporting domestic tax schemes
The so-called Shield 4.0 also introduces a significant change in the deadlines of reporting tax arrangements.
With regard to non-cross-border tax arrangements, the deadlines indicated in the MDR regulations in the Tax Code shall not commence and the commenced ones shall be suspended from 31 March 2020 to the 30th day following the date of cancellation of the state of the epidemic emergency and the state of epidemics announced in connection with COVID -19.