Ministry of Finance announces simplified rules for documenting tax haven transactions

In recent days, Artur Soboń – Deputy Minister of Finance – announced changes in CIT aimed at simplifications and solutions aligned with the current economic situation. The Ministry of Finance proposes simplified rules concerning the documentation of tax haven transactions and increasing the related documentation thresholds (currently at PLN 100,000 for direct tax haven transactions and PLN 500k for indirect transactions). According to the bill announced on 20 June on the website of the Chancellery of the Prime Minister, the thresholds are to be raised twice for direct transactions (to PLN 200k) while they will be changed depending on the type of transaction for indirect transactions.

Also, the Ministry announces abandoning the presumption of the residence of the beneficial owner in a tax haven. The intention is to clarify that the provision applies to the beneficial owner of the receivable resulting from the transaction. It also seeks to depart from the presumption of residence of the beneficial owner in a tax haven in favor of the exemption of the documentation obligation in certain cases.

On the one hand, this is good news for taxpayers yet on the other hand, a major surprise after several months of struggles to meet the regulator’s requirements (including obtaining information by businesses about the owners of actual receivables and documenting transactions with tax haven entities).

For details of the planned changes to the Corporate Income Tax Act and the Personal Income Tax Act go to the website of the Chancellery of the Prime Minister:

https://www.gov.pl/web/premier/projekt-ustawy-o-zmianie-ustawy-o-podatku-dochodowym-od-osob-prawnych-oraz-niektorych-innych-ustaw5

The bill should be published within a month. Consultations of ideas with individual industries should begin soon. We look forward to the details and will keep you posted on the progress of legislative works.

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