2022 will be the second year in which some taxpayers will be required to publish information about the tax strategy implemented in this period.
Who does this obligation apply to?
CIT taxpayers whose revenue in the preceding year exceeded the PLN equivalent of EUR 50 million and tax capital groups. In practice, some taxpayers already published these documents last year. However, it will be a novelty for those who have exceeded the indicated threshold for the first time in 2021.
Where to start?
First of all, from clarifying the scope of duties.
Information on the implemented tax strategy is required to be published on the Internet and sent to the tax authority.
In accordance with the provisions of the Polish CIT Act, this document should include the following information:
- tax compliance management processes and procedures;
- fulfillment of tax obligations by the taxpayer;
- selected transactions with related entities and planned or undertaken restructuring activities;
- submitted tax schemes, submitted applications for individual interpretations, binding rate information, etc.;
- tax settlements in countries applying harmful tax competition.
Here, we can limit ourselves to a brief presentation of these circumstances, however, the provisions require that the document be prepared taking into account the nature, type and size of the conducted activity.
What about the tax strategy?
The tax strategy can be defined as the mission, vision and tax goals of an entity that affect its way of doing business.
When presenting your tax strategy, it is worth taking into account elements such as: management of tax issues, attitude to tax risk, competence and decision-making in the performance of tax tasks, as well as commitment and resource management.
Should one have a tax strategy?
In practice, each taxpayer has his own tax strategy. It manifests one’s approach to tax issues, “appetite” for risk or organization of the fulfillment of tax obligations.
However, it is worth writing down the tax strategy and showing its assumptions publicly as part of the information on the implementation of the tax strategy. It will show a wide range of recipients that we treat tax issues as part of the company’s value. It will therefore be an added value for the image of a given taxpayer.
What about processes and procedures?
In practice, almost every taxpayer uses specific activities for the purpose of proper fulfillment of tax obligations. However, they are often not written down, nor do they form a coherent system. When preparing a tax strategy and information on its implementation, it is worth ensuring that this area is organized and written procedures are prepared in such a way as to facilitate the fulfillment of tax obligations and constitute an argument for the taxpayer’s due diligence.
Our experience shows that the implementation of this type of project is an excellent opportunity to look at tax issues from a new perspective and to organize them. It is worth strengthening the processes that work and changing those that do not bring the expected results.
Feel free to contact us. We have extensive experience in implementing tax strategies and tax procedures for many taxpayers, including entities operating in international capital groups and stock exchange entities.
As a rule, we start with a limited tax review, during which we identify the current state of approach to tax issues and related processes.
Based on the knowledge thus obtained, we help to prepare specific projects of solutions, which, after your approval, take the form of codified procedures and other documents. We also assist in their implementation.
Please do not hesitate to contact us!