Tax schemes reporting (MDR)

On 1 January 2019, an obligation to notify tax authorities of tax arrangement schemes entered into force. Information about tax arrangement schemes made available or implemented after 1 January 2019 should be filed within 30 days of making them available or starting their implementation.
The new MDR law in Poland transposes the Council of the European Union (EU) Directive 2016/1164 (DAC6). The Polish MDR legislation has wider scope than DAC6 Directive: it includes extended definition of reportable tax arrangements which extends to, for example,  domestic tax arrangements.

What is the scope of reporting obligation?

MDR concerns tax-planning schemes understood as an activity or a series of related activities in which at least one party is a taxpayer, or which have or may have an impact on the occurrence or failure of a tax obligation meeting the criteria specified in the Act. At the same time, those activities must meet the criteria indicated in the amended provisions - different for cross-border schemes and for domestic schemes:

• Domestic schemes will be subject to mandatory disclosure if the beneficiary of the scheme will be a qualified entity (revenues, costs or assets of the beneficiary or of its related party exceed EUR 10 mln, or the scheme concerns items or rights of market value exceeding EUR 2.5 mln). Domestic scheme must be reported if first activity concerning it had been made after November 1, 2018,
• Cross-border schemes will be subject to mandatory disclosure, regardless of whether the beneficiary is a qualified entity. Also, there is an duty to report certain information about tax scheme, e.g. detailed description, applied tax las provisions and expected value of tax benefit.  Cross-border scheme must be reported if first activity concerning it had been made after June 25, 2018.

MDR reporting deadlines

Information about tax schemes disclosed in 2018 will have to be reported by June 30, 2019.
On April 30, 2019 the deadline for the reporting tax schemes developed/implemented from January 1, 2019 to 30 March, 2019 has passed. However, the deadline for reports developed/implemented from April 2019 must be reported to authorities within 30 days from the day in which they were developed/implemented. Taxpayers who have not yet analysed their actions in terms of possible existence of tax schemes, should carry out appropriate analyses. If the tax schema is found, they should declare it with an active repentance.

Who is obliged to report?

User: it a subject is an any person to whom or for whom arrangement is implemented
Promoter: it is a subject that implements and arrangement that can meet the conditions to be considered as tax scheme

Sanctions

In the case of failure of fulfilling MDR obligations, the amendment foresees following sanctions:

• up to PLN 20 mln for individuals responsible for reporting tax schemes,
• up to PLN 2 mln for Promoter in case for non-implementation of internal due diligence procedure
  

How can we help you?

• Tax schemes identification.
Our experts from Crowe Tax Advisory Department will support you in identification of transactions/events, made after June 25, 2018, that could be concern as tax schemes.
• Developing internal due diligence procedure.
The procedure will enable ongoing identification of tax arrangements subject to reporting as a tax scheme in terms of MDR (goal: minimizing the risk related to not reporting the scheme, which in the case of control will show that all reasonable measures have been taken to prevent violations).

• Employee trainings.
We will train employees which might participate in activities considered as making tax schemes.
• Support in tax schemes reporting.
Developing an internal procedure for promoters in line with art. 86l of Polish Tax Ordinance