Anti-tax avoidance clause provisions to be broadened in 2019

A legal act amending the anti-tax avoidance regulations will come into effect, making it even easier for tax authorities to act against dishonest taxpayers. The so-called clause against tax avoidance is a regulation introduced in 2016 which provides means for the government to punish those business entities that take actions to pay lower taxes in Poland.

Currently, the clause is effective in case the disputed amount of due tax exceeds 100 000 PLN. This threshold will be done away with from January 2019. Soon, tax authorities may take actions based on the anti-tax avoidance provisions in cases involving much lower transaction amounts. While the law was created with big companies in mind (as they have high revenue and substantial tax obligations), soon the clause will also be used to deal with medium or even small taxpayers.

The provisions in question outlaw actions which are considered “artificial”, i.e. done for the sole purpose of lowering tax obligations, and not justifiable by doing business. The Ministry of Finance says the amended law is not something taxpayers should fear, at least if they are conducting real and economically reasonable operations. The aim of the regulation is “sealing” the fiscal system, i.e. obtaining higher fiscal revenue. Taxpayers should analyse their plans to make sure they are will not be taking fiscal optimisation too far and if their action can be interpreted as breaching the legal provisions.

The clause against tax avoidance was introduced to fulfil the obligations put on Poland by the Anti-Tax Avoidance Directive, a document prepared by the European Commission. It presents the measures all EU member states should introduce to counteract “aggressive tax planning” and ensure better environment for business. Opponents of the new provisions argue that EU regulations do not call for regulations that strict. They fear the authorities fill focus on fighting small businesses obtaining small gains instead of large corporations that have the knowledge and resources allowing for intricate tax avoidance schemes.

What This Means for Businesses in Poland

Tax policy changes in Poland have direct implications for both domestic and foreign-owned businesses. Companies operating in Poland must stay informed about regulatory developments to optimize their tax position and maintain compliance. The Polish tax system includes CIT (19% standard, 9% for small taxpayers), VAT (23% standard rate with reduced rates of 8% and 5%), and various sector-specific levies.

For international entrepreneurs and investors, understanding the Polish tax landscape is essential for business planning. Poland offers several attractive incentives including the Polish Investment Zone (up to 15 years of CIT exemption), R&D tax relief (up to 200% deduction), and the IP Box regime (5% effective CIT rate on qualified intellectual property income). Professional tax advisory can help identify the most beneficial structure for your specific situation.

The interplay between Polish domestic tax law and international tax treaties is particularly important for foreign-owned entities. Transfer pricing regulations, withholding tax provisions, and anti-avoidance rules (GAAR) require careful navigation to ensure both compliance and optimization.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our tax advisory services in Poland, or contact us for a free consultation.