Clause to determine the limits of acceptable tax optimisation | Tax Alert 1/2016

The main purpose of the clause is the seal of the tax system and, consequently, provide an increase in state budget revenues from taxation by ridding the legal system of any artificial tax arrangements which, despite their legal admissibility, are contrary to the goals and objectives of the substantive tax law regulations. In other words, the essence of the tax avoidance clause is to determine the limits of acceptable tax optimisation and deprive the taxpayer of the right to tax advantages achieved as a result of abusing tax regulations.

Importantly, the tax avoidance clause will not apply to activities resulting from real business, nor to capital structures which are geared solely to achieve tax advantages. Attempts by taxpayers to undertake activities, which can be classed as having a legitimate purpose and economic sense, will be treated under the amended provisions of the Tax Ordinance Act as actions whose primary purpose was not to achieve tax optimisation.

As the draft tax avoidance clause is currently in the process of public consultation, it is difficult to predict its final shape. The expected date of its introduction into the Polish tax is not fully known either. According to the declarations of the Minister of Finance, the amended of the Tax Ordinance Act should come into force by the end of Q1 2016.

Nonetheless, it is by no means too early to investigate the impact of the tax avoidance clause on existing arrangements in controlled ownership structures.


Patrycja Goździowska, Partner, Tax Advisor

Tomasz Wickel, Partner, Tax Advisor

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