Poland has published the Law of 26 October 2019 on the settlement of disputes regarding double taxation and the conclusion of advance pricing agreements, which generally entered into force on 29 November 2019. One of the main purposes of the law is for the implementation of Council Directive (EU) 2017/1852 of 10 October 2017, which includes rules to ensure effective resolution of disputes concerning the interpretation and application of bilateral tax treaties and the Union Arbitration Convention, and in particular, disputes leading to double taxation. The measures of the Directive apply in Poland for disputes in relation to income or capital obtained in tax years beginning after 31 December 2017.
In addition to the measures for implementing the Directive, the Law also includes new provisions for the conclusion of advance pricing agreements (APAs), with the existing provisions on APAs in the Tax Code (Section IIA) repealed. The new APA provisions are similar to the provisions under Section IIA, although, in addition to accepting applications from domestic Polish entities, applications may also be accepted by natural persons and non-resident legal persons intending to create a related entity with operations in Poland. Approved APAs may apply from the beginning of the tax year in which the application was submitted, and may have a term of validity of up to five years ending at the end of the applicant's tax year, which may be renewed for an additional period of up to five years if there have been no significant changes.
Lastly, the Law introduces a new Section IIB on cooperation agreements, which may be requested by taxpayers that had income exceeding the PLN equivalent of EUR 50 million in the previous year. Cooperation agreements are meant to ensure compliance by taxpayers with tax law provisions based on transparency of undertaken tax strategies and mutual trust between the tax administration and the taxpayer and allow taxpayers the opportunity to agree with the tax authority on matters related to their tax settlements.
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