Pursuant to regulations effective as of 1 January 2021, the obligation to prepare and publish a report on the executed tax strategy rests with CIT payers whose revenue exceeds EUR 50 million annually and tax capital groups. The report on the tax strategy pursued in the given tax year must be published on the taxpayer's website by the end of the twelfth month following the end of the tax year for which it is due.

The report on the tax strategy pursued in the given tax year must be published on the taxpayer's website by the end of the twelfth month following the end of the tax year for which it is due.

Scope of information to be disclosed

The obligation to prepare and publish a report on the executed tax strategy pertains to single corporate income tax payers and tax capital groups. The obligation starts to apply to single CIT taxpayers when their revenues exceed the equivalent of EUR 50 million in the tax year for which the report on the tax strategy is due. Importantly, the obligation also applies to all tax capital groups, regardless of the amount of revenues earned.

The list of information that must be disclosed as part of the tax strategy is not exhaustive, yet the key items thereof include:

  • information on the taxpayer-implemented processes and procedures ensuring proper performance of tax obligations, along with forms of voluntarily undertaken cooperation with the bodies of the National Revenue Administration;
  • information on the taxpayer's performance of tax-related duties in the territory of the Republic of Poland;
  • information on transactions with related entities (including those being foreign tax residents) within the meaning of TP provisions, with the value exceeding 5 percent of the balance sheet total, determined as per the last approved financial statement;
  • information on the taxpayer’s planned or performed restructuring activities that may impact the amount of tax liabilities due from the taxpayer or the taxpayer’s related entities within the meaning of TP provisions;
  • information on the submitted applications for advance rulings, binding rate information or binding excise information;
  • information on the number of submitted information on implemented tax schemes (MDR);
  • information on the taxpayer’s tax settlements in countries or territories applying harmful tax competition.

The scope of the published information should also reflect the character, type, and size of the taxpayer’s business. Therefore, in some cases, the scope of information provided in a tax strategy report will have to extend beyond the list presented above.

Importantly, the assumption is that information subject to trade secret, industrial secret, professional secret and/or manufacturing secret should be excluded from the strategy.

However, bearing in mind that the above exemption makes reference to terms that are inherently vague and imprecise, the exact scope of which may be open to debate, in order to avoid possible disputes with tax authorities, its application should be preceded by a detailed analysis aimed at confirming the possibility of exempting certain data from the disclosure obligation.

Taxpayers covered by the obligation to establish a tax strategy must prepare and publish the report on the tax strategy pursued in the given tax year by the end of the twelfth month following the end of the tax year for which it is due.

Obligation to publish the strategy by the end of 2021

Due to the lack of clear interim provisions, the issue of the first tax year for which a report on the executed tax strategy should be prepared and published by the taxpayers covered by the new reporting obligation, as well as the issue of the deadline for the submission thereof, have raised numerous interpretative doubts.

According to the statement made by the Ministry of Finance last year, the tax strategy for 2020 should already be prepared by 31 December 2021.

This year, however, the government informed about the possible postponement of the date of publishing the first report on the implemented tax strategy until the end of 2022. Relevant regulations were to be included under the Legal Shield mechanism (containing additional legal solutions to mitigate the negative economic effects of the pandemic) elaborated by the Ministry of Economic Development, Labour and Technology. Any draft thereof, however, has not yet been published. Furthermore, no provisions on extending the deadline for publishing a report on the tax strategy pursued have been included in the draft amendment to tax laws presented under the Polish Deal government program. At a press conference held on 11 September 2021, however, Deputy Minister of Finance, Jan Sarnowski, confirmed that the obligation to provide information on the performed tax strategy should be implemented already this year.

This means that unless clear legislative changes are passed in the near future, taxpayers subject to the new reporting obligation must prepare and publish a report on the tax strategy implemented in the fiscal year 2020 already by 31 December 2021.

Information on the address of the website on which the report on the tax strategy executed in the given tax year is published must be submitted to the head of the competent tax office within the same deadline.

Failure to do so may result in a financial penalty of up to PLN 250k.

If you would like to learn more about the issue discussed, please do not hesitate to contact us.

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