On 25 May 2018, the Economic and Financial Affairs Council of the European Union (ECOFIN) adopted the 6th Directive on Administrative Cooperation (the “DAC6”), requiring so-called tax intermediaries to report certain cross-border arrangements.
The deadline for each EU Member State to transpose the Directive into national law and legislation is 31 December 2019.
On 31 January 2019, Poland’s Finance Ministry (MOF) published a 102-page guidance document on the country’s new tax reporting requirements which apply retroactively from 1 January 2019, and these included the implementation of DAC6. This is earlier than the 1 July 2020 obligation as stipulated in DAC6, therefore anyone dealing with Polish transactions should ensure they have DAC6 reporting measures in place already.
Free download: DAC6 guide to compliance
The guidelines were based on comments submitted during public tax consultations conducted by the Finance Ministry from December 2018 to January 2019.
DAC6 in full force in Poland – what this means
Three main takeaways from the new Polish legislation:
- Earlier deadline enforced – Poland has taken a stricter approach to DAC6 than required by the Directive itself. They require all arrangements affected by DAC6 entered into between 25 June 2018 and 1 January 2019 to be reported to the Polish tax authorities by 30 March 2019. Note this is nearly a year and a half ahead of the 31 August 2020 deadline stated in the DAC6 Directive.
- Additional specific hallmarks introduced – Polish legislation also refers to a set of “other specific hallmarks”, which are in addition to the hallmarks mentioned in DAC6. The application of these hallmarks is still unclear. However, they will generally not trigger a reporting obligation if they are over a certain value threshold, unless they are made as part of a reportable arrangement.
- No reporting obligation for arrangements before 25 June 2018 – If a reporting arrangement was initiated before 25 June 2018, there are no obligations to report this to the Polish tax authorities; this applies even if the actual tax benefit is realized after 25 June 2018.
DAC6 reporting requirements
If your organisation deals with operations in Poland, it is advisable that you ensure you already have an adequate strategy in place for reporting a potential cross-border transaction involving Poland. VinciWorks’ DAC6 reporting portal allows intermediaries to record all cross-border transactions while guiding them on which transactions require reporting. The portal links to the DAC6 training to review specific hallmarks and reporting requirements.