The regulations on tax evasion will be effective, if they are not abused – experts say. – The clause is intended to combat aggressive tax optimization. These optimizations hurt the competitive position of those companies who do not use them – explains Mariusz Korzeb, tax adviser and expert of Employers of Poland.
Friday July 15th marks the coming into force of the new Tax Ordinance introducing the so-called tax evasion clauses. These regulations will make it possible – generally speaking – to question the legality of the taxpayers actions if their main aim is to acquire tax benefits. The mechanisms in question were controversial from the very beginning of the legislative procedure. After initial objections, business organizations now support the solution.
Taxpayers who are not sure whether the regulations apply to them, can ask the Minister of Finance to issue a so-called securing opinion: a sort of a tax interpretation – however, a very costly one. It will cost 20 000 PLN (a regular tax interpretation costs 40 PLN).
In its current form, the clause does not apply to VAT. However, a counterpart of this mechanism comes into force in the VAT act, making it possible to question the legality of tax benefits acquired in abuse of the law.
The Minister of Finance does not have a free hand in applying the clause: according to a new regulation in the Ordinance, he first has to use other means of combatting tax evasion: of which plenty have appeared in recent years, such as new regulations on transfer prices or on the taxation of CFCs.
Expert are concerned that tax authorities will not follow the requirement to use other tools before turning to the clause. – Proper application of regulations on transfer prices requires complicated economic analyses which may sometimes be beyond the capacities of administration – remarks Mariusz Korzeb.
The article in full is available here.