On June 16, 2023, the Health Minister’s regulation on the cancellation of the epidemic emergency status in the territory of Poland was published in the Journal of Laws. Pursuant to the regulation, the COVID-19 epidemic emergency has been abolished as of July 1, 2023. The above affects the suspension of the reporting deadlines for selected tax schemes (MDR). The obligation will be in force again on the 30th day after the abolition of the epidemic emergency.
MDR regulations in Poland
Polish regulations on tax schemes reporting are effective as of January 1, 2019. The mandatory MDR reporting in Poland arises in relation to:
- cross-border schemes
- other than cross-border ones – so-called domestic schemes.
In the context of the mentioned regulation, the second – domestic schemes – should be analyzed in detail. They are subject to reporting only if they involve a so-called qualified beneficiary. The criterion of the qualified beneficiary is met when the entity’s revenues/costs/assets exceed the equivalent of EUR 10 million or the value of the subject of the arrangement does not exceed EUR 2.5 million.
This means that the obligation does not arise when the qualified beneficiary criterion is not met and the cross-border criterion is not met at the same time. Thus, most small companies as well as individuals can avoid reporting obligations.
Revocation of the epidemic emergency and reporting of tax schemes
The running of the deadlines for reporting domestic tax schemes is suspended until the 30th day after the cancellation of the emergency status declared in connection with COVID-19, under one of the so-called Anti-Crisis Shields. In fact, the status of emergency was already revoked on July 1, 2023, based on the published in the Journal of Laws Health Minster’s regulation.
This rule is significant for mandatory reporting in the context of domestic schemes. It means that, in principle, in August 2023 the deadline for reporting unreported schemes for the past 3 years will be due – as this is how long the suspension period caused by the pandemic lasted.
This is why it is so important for taxpayers to react quickly and effectively, and to properly identify and fulfill MDR obligations for the pandemic period.
Sanctions
All entities that could potentially be subject to MDR obligations in Poland should review their transactions/arrangements for at least past 3 years.
Failure to comply with MDR reporting obligations or to meet statutory deadlines could result in hefty financial penalties of up to PLN 34 560 000 as of July 2023.
Sources:
https://dziennikustaw.gov.pl/D2023000111801.pdf
Tax Ordinance Act of August 29, 1997 (Journal of Laws 2023, item 614).
E-mail: monika.golebiewska@accace.com
Phone: +48 22 313 29 50
