The General Anti - Avoidance Rule is being implemented into Polish tax law. On 7th June 2016 the President signed the act amending The Tax Ordinance Act. It is going to enter into force on 15th July 2016.
Introduction of the above regulation aims to combat artificial transactions that are performed solely for the purpose of tax avoidance and obtaining tax benefits. Such transactions shall not result in tax benefits and will be regarded as if the alternative 'appropriate' legal transaction had been performed. It means that the transactions will be considered as artificial if they have no economic purpose and justification, that is to say if they would not have been conducted by
a reasonably acting taxpayer who follows the rules enacted by law.
The tax benefits may consist of reducing, postponing or avoiding the tax liability, creating the surplus of the tax payment or the entitlement to a tax refund. The applicability of the GAAR has been limited to the transactions that had resulted in a tax benefit in excess of
PLN 100 000 in the settlement period.
The General Anti - Avoidance Rule will allow the tax authorities to revaluate the transactions which were driven only by tax benefits. In order to do it, 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 construction available to perform by the taxpayer in the certain situation.
The Act enforcing the GAAR constitutes the Council for Tax Avoidance Matter. It is an independent advisory body which the parties of the tax assessment proceeding may seek opinion from. The Council issues non - binding opinions on whether the GAAR is applicable in a certain tax case or not. The opinion shall be given on request of a tax authority or the taxpayer taking part in a pending proceeding.
It is substantial for the taxpayers to keep proper documentation of the transactions since the GAAR may also apply to the results of the transactions performed before 15th July 2016 if the tax advantages occurred after enforcing the GAAR.