On 5 June 2018 the Council of the European Union published Directive 2018/822 of 25 May 2018 on administrative cooperation in the field of taxation, the so-called DAC6 Directive. The DAC6 Directive came into force on 25 June 2018 and must be adopted by EU member states by 31 December 2019. The member states have to apply the provisions complying with the DAC6 Directive from 1 July 2020.
Poland as a pioneer regarding DAC6 Directive
Poland has brought forward the transposition date of the DAC6 Directive into Polish legislation. The obligation of reporting tax arrangements has been in force since 1 January 2019, which means 18 months earlier than the deadline of 1 July 2020 required by the DAC6 Directive. Moreover, the Polish Mandatory Disclosure Rules (MDR) legislation is much wider in scope in comparison to the provisions laid down in the EU regulations.
Despite the fact that the Polish act transposes the DAC6 Directive, both acts differ significantly. Under the Polish MDR legislation the obligation of reporting is extended as compared to EU regulations to include not only cross-border arrangements, but also domestic tax arrangements if the taxpayer is a “qualified beneficiary” within the meaning of the law. Furthermore, Poland introduced a few additional hallmarks.
MDR for domestic VAT arrangements
Consequently, the implementation of the DAC6 Directive in Poland imposes some obligations with respect to VAT. If an arrangement concerns only VAT it may fall under the obligation of reporting in Poland as a domestic tax arrangement (cross-border arrangements covering only VAT are not reportable). According to explanations provided by the Polish Ministry of Finance, this obligation does not, however, arise in the case of, e.g.:
- choosing VAT taxation of real estate transactions by waiving voluntary VAT exemption, and
- activities regarding past transactions aimed at proper VAT settlement (VAT compliance)
Dates, deadlines and fines
Tax arrangements which concern only VAT are reportable if the first activity regarding this arrangement was conducted in the period from 1 November 2018 onwards. For those from 2018, the deadline of 30 June 2019 is generally applicable.
Tax arrangements commencing after 1 January 2019 are reportable within 30 days of the day the scheme is made available for the client, ready for implementation or offered, whichever is sooner.
However, the authorities confirmed that delays in complying with reporting obligations under MDR will not have adverse consequences for those required to report, provided full compliance was ensured by 28 February 2018. Importantly, the deferred reporting deadline does not apply to disclosures concerning any time after 29 January 2019. A compliance delay of up to two further months (i.e. where compliance is ensured between 1 March and 30 April 2019) will, however, be treated only as a light infringement.
Any failure to meet a reporting obligation may be subject to a fine of up to PLN 21.6 million (roughly EUR 5 million).
If you would like to know more about implementation of the DAC6 Directive in Poland, please visit the homepage of WTS&SAJA Sp. z o.o., the exclusive representative of WTS Global for Poland.