Since the beginning of 2019, Poland has introduced regulations on reporting of the so-called tax schemes (MDR – Mandatory Disclosure Rules).
These regulations were introduced into the Tax Ordinance and implement the DAC6 Directive. However, Poland has introduced much broader obligations than those resulting from the DAC6 Directive.
Events and transactions that meet one of 24 hallmarks may be reported. It is worth remembering that for some hallmarks, it is not necessary for the transaction to be aimed at gaining a tax advantage. In practice, large part of the reported events cover standard operations that do not raise any tax doubts (e.g. large cross-border payments).
Depending on the role in a given transaction, scheme promoters (e.g. advisors proposing a given solution), beneficiaries (clients using a given solution) or supporters (e.g. a lawyer preparing a contract) may be identified. Each of these entities may be required to report.
In addition to the obligation to identify and report tax schemes, entities that are promoters (as well as those that employ promoters or actually pay them remuneration) whose revenues or costs exceed PLN 8 million are obliged to introduce and apply the internal MDR procedure. Failure to comply with the MDR procedure may result in a fine of up to PLN 2 million, which may be increased to PLN 10 million in certain cases.
Failure to report carries a penal-fiscal risk (KKS) for those responsible.
MDR Audit and implementation of MDR procedure
How can you ensure your company complies with these requirements? A good solution will be an MDR audit, which includes a comprehensive verification of the business in terms of the presence of tax schemes and mapping of “increased MDR risk” areas. At the same time, it is crucial to introduce the MDR procedure. For some entities it is required by law, and for others it will be the best tool for minimizing MDR risk in the enterprise.