Return of Obligation to Report Domestic Tax Schemes

As of 1 July 2023, the state of epidemic threat connected with Covid-19 has been lifted. This means the return of the obligation to report domestic tax schemes (after 30 days from the date the state of epidemic threat was lifted, i.e. from 1 August 2o23).

Reporting Obligations under MDR

The Tax Code, which implements Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU (DA C6) as regards mandatory automatic exchange of information, distinguishes two types of tax schemes:

• cross-border schemes (covered by DAC6), and
• schemes other than cross-border schemes (so-called domestic schemes).

It is worth noting that Polish MDR regulations impose reporting obligations not only on Polish residents but also on entities serving as promoters/supporters that do not have a registered office in Poland.

Based on the provisions of the so-called “Anti-Crisis Shield”, MDR reporting deadlines for schemes other than cross-border schemes were suspended from 31 March 2020 until the 30^th day following the date of lifting the state of epidemic threat and the state of epidemic introduced in connection with Covid-19.

Impact of Lifting the State of Epidemic Threat on MDR Obligations

From 1 August 2023, the deadlines for reporting domestic tax schemes start (or continue) to run. Depending on specific circumstances (e.g., the entity’s role and the scope of reporting obligations), the restored deadlines for reporting so-called domestic schemes may vary but, in principle, should fall in August 2023. MDR reporting deadlines were suspended for over 3 years. The return of this obligation means that taxpayers have very little time to correctly identify reportable events and submit the necessary MDR reports.

Consequences of Non-Compliance

Failure to comply with MDR reporting obligations within the applicable deadlines may result in high penalties being imposed on company management board members or other persons responsible for handling its economic/financial matters ( the maximum fine may exceed PLN 34 million). Additional sanctions may also be imposed.

To avoid the risk of sanctions, entities that in the period from 31 March 2020 to 1 July 2023 engaged in any activities that might be subject to tax scheme reporting obligations should, therefore, review their transactions/arrangements (at least for the last 3 years) to determine the scope of their MDR obligations.

Download pdf in English
Download pdf in Polish

How can we help you?

We have extensive practical experience drafting MDR reports and providing guidance on tax scheme reporting. Numerous companies from a wide range of industries have benefitted from our advice. Leveraging our considerable expertise in this field, we can help you quickly review reportable events and discharge any outstanding reporting obligations.

Feel free to reach out – we are here to help:
Head of Tax Piotr Prokocki
Junior Tax Associate Klaudia Szczepanowska