Tax rulings regarding transactions between related parties will automatically expire

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According to the draft of amendment to the Tax Ordinance Act, there are planned changes regarding submitting the applications for individual tax rulings, implementing a specific, obligatory procedure of issuing individual rulings in respect of transactions and actions performed by related parties (“group application”).

In accordance with the draft of amendment, the idea of ​​a new provisions is to limit “abuses” of taxpayers, who participate in complex transactions and apply for separate rulings, that only partially present the business context of the entire transaction.

According to the Ministry of Finance, this type of practice, including among others submitting of applications by companies in the organization or non-operating companies, was aimed at obtaining favorable rulings which enabled implementation of tax optimization.

The rulings subject to a special procedure for a group application in accordance with the new provisions, should be updated to fulfill new requirements within 6 months from the date of entry into force of the new Tax Ordinance Act. According to the draft, not updated rulings will automatically expire. So, it is crucial to perform review of obtained rulings and possible impact of new provisions.

The planned date of entry into force – 14 days from the day of publication in the Polish Journal of Laws.