Tax strategy – what is it and who does it apply to?

Who is affected by the tax strategy?

The disclosure obligation regarding tax strategy applies to taxpayers whose revenue in the tax year exceeded €50 million. The amount of €50 million is calculated using the average exchange rate of the National Bank of Poland (NBP), which is announced on the last working day of the calendar year preceding the reporting year. The Act does not specify the legal forms of taxpayers subject to this obligation; it is understood that this obligation applies to any CIT taxpayer whose revenue is sufficiently high.

The obligation also applies to tax groups; this concerns the entire group and all companies comprising it. A tax group is obliged to fulfil this obligation regardless of the amount of revenue generated.

Entities that are party to a cooperation agreement concluded with the Head of the National Revenue Administration are exempt from the obligation to prepare and publish information on their tax strategy.

A list of the entities subject to this obligation is published annually. The Minister responsible for finance is required to publish, in the Public Information Bulletin, data from the corporate income tax returns of taxpayers whose revenue exceeded the equivalent of EUR 50 million. The Minister must also make available information on tax groups and property companies.

What must the tax strategy disclosure contain?

Information on the processes and procedures applied to manage the fulfilment of obligations arising from tax legislation, which ensure their correct execution. The information should include details of the fulfilment of tax obligations within the territory of the Republic of Poland.

The taxpayer must also provide information on voluntary forms of cooperation with the National Revenue Administration (KAS).

The tax strategy must include information on applications submitted by the taxpayer for: a general tax ruling, an interpretation of tax law provisions, binding rate information, and binding excise duty information.

The entity must also include information on transactions with related parties within the meaning of transfer pricing regulations, the value of which exceeds 5% of the balance sheet total of assets within the meaning of accounting regulations, as determined on the basis of the latest approved financial statements. The strategy should include information on any planned restructuring measures that may affect the amount of tax liabilities.

Method of publishing the tax strategy

The taxpayer should publish information on the tax strategy in Polish on their website. Where the taxpayer does not have their own website, the information shall be published on the website of a related entity. The website should contain information regarding the tax strategy implemented for each year. The taxpayer should inform the head of the tax office with jurisdiction over them of the relevant website address.

The information should be made available by the end of the 12th month following the end of the tax year to which the report relates.

The legislator has not provided a specific template for the tax strategy document.

Penalties for failure to comply with the disclosure obligation regarding the tax strategy

In the event of failure to comply with the above obligation, the entity is liable to a financial penalty. The financial penalty is imposed by the head of the tax office competent for the taxpayer. The penalty is imposed by way of a decision. The maximum fine is PLN 250,000. If you need assistance with your tax strategy, please contact HWW Hewelt Wojnowski Lindner i Wspólnicy.