The draft amendment of the tax law provides for a limited possibility of issuing individual tax rulings with respect to anti-avoidance rules.
The draft of the Act amending the Personal Income Tax Act, the Corporate Income Tax Act, the Tax Ordinance Act and some other laws of September 17, 2018, which is to become effective as of the beginning of 2019, introduces numerous changes in anti-avoidance rules. One of the major issues is a limited possibility of issuing individual tax rulings with respect to anti-avoidance rules.
Pursuant to proposed amendments, the government intends to introduce a provision that will basically prevent taxpayers from submitting applications for individual tax rulings, also those related to tax avoidance, should the ruling entail evaluating whether a particular activity has a legitimate economic reason. In that case, the taxpayer will have to apply for an advance (protective) tax ruling. Pursuant to the statement of reasons of the draft amendment, the reason for the introduction of provisions that limit the possibility of obtaining individual tax rulings with respect to the anti-avoidance rules as well as the specific anti-avoidance rules, is the lack of regulations excluding the possibility of applying for a tax ruling with respect to the provisions of the specific rules or measures limiting contractual benefits, even though the substantive tax law contains regulations similar to the general anti-avoidance rule.
It is worth remembering that contrary to tax rulings, the process of obtaining an advance ruling is more complex and time-consuming. The fee for issuing the ruling is also considerably higher. So far, only two advance tax rulings have been issued. Nevertheless, it can be said that because of the growing importance of this procedure in the Polish tax law, the number of applications for advance tax rulings is likely to increase.
