Less than two months from now, the Multilateral Instrument to Modify Bilateral Tax Treaties – or, for short, the MLI Convention – will come into force, irrevocably changing the fiscal rules concerning avoidance of double taxation (...)

According to the Polish Ministry of Finance, the new rules will apply to taxpayers deploying complex tax optimisation schemes, such as SPV structures. In practice, the PPT clause is a single, highly complex, seemingly unending and very vague sentence. The net effect – according to Dr Janusz Fiszer, attorney and certified tax advisor, partner in GESSEL Attorneys at Law and research fellow at the University of Warsaw – is that, if it transpires that the main objective of a given structure or transaction lies in obtainment of tax benefits, the tax authorities will be able to disregard the formal effects of such actions and challenge the benefits thus obtained, e.g. a tax exemption or a reduced rate of income tax collected at source. “Thus, this is, in essence, the international law equivalent of the general tax evasion clause to the Polish tax system in July 2016 (art. 119a of the legislative Act of 29 August 1997 – the Tax Ordinance, ; 2018 Dz.U., item 800)”, Janusz Fiszer explains (...)

The whole article is available in today’s edition of Dziennik Gazeta Prawna and on the DGP website.

The full text of this article is available for download in Polish. If you are interested in an English-language version or in discussing the issues raised herein with one of our lawyers, please contact: kontakt@gessel.pl