One-Time Use Of The Anti-Tax Avoidance Clause

The anti-tax avoidance clause, introduced in 2016, allows to question of tax benefits obtained through pretended actions leading to decreased taxation. During the nearly a year of the clause being in effect, there was merely one case of proceedings initiated with its use. As the Ministry of Finance explains, the number of proceedings is determined by the short period of time the clause is in force. Due to the fact, it mainly concerns income taxes and it came into effect in the middle of last year, the first tax year it will be fully applied to is 2017.

According to information from the Ministry of Finance, there were five motions considered regarding the issuance of the so-called advance protective tax ruling. It is to include an analysis of legal actions that will be examined with respect to meeting the criteria of using an anti-tax avoidance clause. The Ministry of Finance reported that on two occasions advance protective tax rulings were declined and two motions were left without consideration due to failure to correct formal errors.

It is worth stressing that, as Professor Dominik Gajewski, head of the Tax Analysis and Study Center at Warsaw School of Economics sees it, until now the anti-tax avoidance clause was only a scare and it should be made certain it starts to be treated seriously. The Tax Analysis and Study Center undertook to analyze the clause comprehensively. According to the Centre, among its advantages are chances for putting the tax law system in order and determining the limitations of acceptable tax optimization. There were also flaws detected, such as e.g. imprecision of the term “artificiality of transaction”.

As one can read in the Tax Analysis and Study Center report, the first anti-tax avoidance clause was introduced in Poland in 2003, yet it was challenged by the Constitutional Tribunal. Only a direct indication on the part of the European Commission resulted in the re-introduction of the solution to the Polish tax law system together with changing its shape.

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.