Exchange of Information Not Automatic Under Bermuda-Poland TIEA – GESSEL Attorneys at Law
Poland's tax information exchange agreement with Bermuda, which entered into force on March 15, provides only for an exchange of tax information on request, without referring to an automatic or spontaneous exchange of tax information. (Polish text of the TIEA. Prior coverage.)
The TIEA, which was signed November 25, 2013, is generally based on the 2002 OECD model agreement on the exchange of information in tax matters, which provides for an exchange of tax information in the event of a tax examination abroad, as well as a mutual agreement procedure.
The agreement provides that the parties shall provide assistance through the exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws governing the taxes covered by the treaty, including information that's foreseeably relevant to the determination, assessment, and collection of tax; the recovery and enforcement of tax claims; and the investigation of tax matters and prosecution of criminal tax matters.
In the case of Poland, the TIEA applies to personal income tax and corporate income tax, and in the case of Bermuda, it applies to direct taxes of every kind.
The scope of information that may be mutually exchanged is wide. It includes:
- information held by banks, other financial institutions, and any person, including nominees and trustees, acting in an agency or fiduciary capacity;
- information about the legal and beneficial ownership of companies, partnerships, public collective investment schemes, trusts, foundations, and other persons, including information on all such persons in an ownership chain;
- in the case of public collective investment funds or schemes in particular, information about shares, units, and other interests; and
- in the case of foundations, information about the founders, members of the foundation council, and beneficiaries; and
- in the case of trusts, information about the settlors, trustees, protectors, and beneficiaries.
However, the party to the agreement isn't required to obtain and provide information that the competent authority of that country wouldn't be able to obtain under its laws or in the normal course of administrative practice. Another important provision givesthe representatives of the competent authority of one country the right to attend a tax examination in the territory of the other country.
Poland has extensively expanded its network of bilateral TIEAs in recent years. It has eight agreements like that in force, including TIEAs with Andorra, the Cayman Islands, Gibraltar, Guernsey, Isle of Man, Jersey, San Marino, and now, Bermuda. Seven other TIEAs -- with the Bahamas, Belize, the British Virgin Islands, Dominica, Grenada, Liberia, and the United States (under the U.S. Foreign Account Tax Compliance Act) -- have been signed and await ratification.