Agnieszka Gliwińska

Tax adviser (Poland)
Senior Associate
Phone: +48 71 606 04 04

An internal procedure to prevent failures to report tax schemes became mandatory on 1 January 2019. A lot of enterprises are unaware of their new obligation and the ensuing criminal and fiscal ramifications.

Such a procedure is mandatory in enterprises which are promoters, which hire promoters or pay fees to promoters, whose revenues or expenses (in the meaning of the accounting regulations) exceeded the equivalent of 8 million Polish zloty in the previous financial year. The revenues or expenses are calculated on the basis of the books of account.

Every enterprise should check if it acts as a promoter, i.e. whether its actions include developing, offering, making available or implementing a tax scheme. Numerous companies are promoters unwittingly by making standardised arrangements, developed in house or by other promoters, available to others. An internal procedure is mandatory also for businesses which should not provide advisory services for regulatory reasons but do it anyway.

A promoter who meets the 8-million-zloty criterion will have to follow the procedure for three consecutive financial years after the year in which the procedure became mandatory for him, even if the revenues or expenses in the year of the procedure implementation did not exceed PLN 8 million.

In-house adviser

As a rule, the internal procedure is not mandatory in users who hire in-house advisers under employment contracts or other civil law contracts. Such individuals usually develop tax schemes for their employer only. However, if the nature of his actions and tasks suggests that the in-house adviser shares his advice with entities other than his employer, the employer may be treated as a promoter.

Importantly, the fact that the user has paid for the tax consulting service does not automatically mean that he must have an internal procedure if the effects of the consulting are used exclusively in the user’s business.

Objective of the internal procedure

The internal procedure should work as a tool to correctly identify the reporting obligation on time. The procedure helps to determine the scope of responsibility of the persons engaged in the certain tasks and actions concerning the schemes (development, presentation, implementation, audit etc.) for the fulfilment of the tax scheme disclosure obligation. It should also guarantee that the promoter correctly fulfils the information obligations towards the user. 

What should be included in the internal procedure?

The specific solutions should be adapted to the nature, type and size of the business. Significantly, before the procedure is implemented, it must be approved by the top management, including board members or directors who are familiar with tax laws and make decisions which affect the risk of non-compliance on the part of business partners-users.

Mandatory components of the procedure are listed in Article 86l of the Polish Tax Act. The procedure should describe measures to be followed to fulfil the reporting obligations. Sample measures include:

  • stocktaking and selection of steps taken to fulfil the reporting obligation;
  • reviews of legislative changes;
  • employee training;
  • engagement of professional legal and tax consulting firms.

The procedure should describe how documents and information will be stored, especially the reports submitted to the Head of the National Tax Administrations, notices of tax scheme numbers, information and statements obtained from promoters and supporters, information shared as a promoter or supporter. The procedure should also describe how employees may report real or potential MDR violations, the internal control rules or compliance audits.

Consequences of the lack of the internal procedure

The Tax Act stipulates an administrative penalty of up to PLN 2 million for failure to implement an internal procedure in enterprises obliged to do it.

However, the fine may go up to as much as PLN 10 million if the enterprise does not have the mandatory procedure and at the same time the individual hired (or paid) by that enterprise is a promoter and is convicted of a fiscal crime or offence of non-compliance with the MDR.

The above-mentioned penalties apply as well to failures to follow the procedure.

The fine will be imposed by the Head of the National Tax Administration by means of an administrative decision and the proceedings will follow the Code of Administrative Procedure. Interestingly, the Code lists circumstances when the fine may be avoided. Moreover, the following circumstances are always taken info account whenever the fine is to be levied: the weight of the non-compliance, the value of gain obtained or loss avoided, previous convictions for the same fiscal crime or offence, voluntary actions taken by the breaching party to remedy the violation of law. 

Our experts would be glad to answer all your questions about the Mandatory Disclosure Rules. Come and meet us in our offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw.


Krzysztof Wylegalski