Have you reported your cross-border tax arrangement? – It’s okay, now you will have to do it again!

The Council of Ministers have adopted a draft act amending the provisions on mandatory disclosure rules (MDR). The changes are primarily aimed at adapting the provisions already in force to European Union regulations, including enabling the Head of the KAS to fulfill the obligation to provide information on cross-border tax arrangements to EU Member States.

As indicated in the explanatory memorandum to the bill, the format of information provided so far is not consistent with the EU regulations, and adapting the data held by the Head of the KAS (Tax Authorities) to it is not possible without the participation of the intermediaries, beneficiaries and auxiliaries.

The most significant effect of the proposed regulations for entrepreneurs will be the obligation to report cross-border tax arrangements if the first activity related to their implementation was carried out between the 26th of June 2018 and 31st of March 2020.

This means that all previously reported cross-border tax arrangements and those that will be reported by March 31st, 2020 will be subject to re-reporting:

  • by the intermediary – until May 31, 2020;
  • by the beneficiary (if s/he has not been informed about the NSP – by the 30th of July 2020.

Importantly, the NSP (number of the tax arrangement) granted so far for cross-border tax arrangements will become invalid by law on April 1st, 2020 and will be replaced by the new NSP issued for the re-reported cross-border arrangements.

The draft law introduces the obligation to provide information on a cross-border tax arrangements by an auxiliary, if s/he has not been informed about the NSP – by the 31st of August 2020. The imposition of a retrospective obligation to reporting arrangements also by the auxiliaries is a new solution that was not previously in the Tax Code.

The draft bill also includes several other modifications to the current regulations, including the extension of one of the specific hallmarks, and the extension of the deadline from 7 to 30 days in which the head of the KAS (Tax Authorities) will be required to confirm NSPs.

If the date of entry into force of the regulations planned for April 1, 2020 does not change, entrepreneurs will have extremely limited time to fulfill their obligations.

If you have any questions, please contact us.

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