The GAAR targets artificial transactions carried out solely for the purpose of tax avoidance and obtaining tax benefits.

Transactions falling within the GAAR will be taxed as if an alternative 'appropriate' legal transaction had been carried out.  Transactions will be considered as artificial if they have no economic purpose and justification, that is to say if they would not have been entered into by a taxpayer acting reasonably in accordance with the legislation.

Tax benefits consist of reducing, postponing or avoiding liability to tax, creating an overpayment or the entitlement to a tax refund. The GAAR applies to transactions that result in a tax benefit in excess of PLN100,000 in the settlement period.

The GAAR will allow the tax authorities to re-evaluate transactions with the sole purpose of achieving tax benefits. In order to do this, the tax authorities have to prove that the avoidance of tax was the taxpayer's intention; indicate the amount of the tax benefit and prove that there was an appropriate legal way of carrying out the transaction in the same situation.

The Council for Tax Avoidance Matters will enforce the GAAR. This is an independent advisory body from which the parties to tax assessment proceedings may seek an opinion. The Council issues non - binding opinions on whether or not the GAAR is applicable in certain tax cases.

It is essential for taxpayers to keep proper documentation of all transactions, since the GAAR can also apply to transactions carried out before 15 July 2016 if the tax advantages arose after the GAAR entered into force.