GAAR In Poland – Effective: June/July 2016

On 13 May 2016, the lower chamber of the Polish parliament (Sejm) enacted changes to the Tax Ordinance Act and certain other acts. Among the changes is the introduction of a general anti-avoidance rule ("GAAR"), an abuse of right clause for VAT and certain novelties in mandatory VAT reporting in Simple Audit File format.

The law has been adopted by the Senate on May 19, and has been submitted to the President for signing. We expect it to become effective in late June this year.

Applicability of the GAAR

The GAAR is to apply to activities performed primarily in order to achieving a "tax benefit" that is inconsistent with the purpose and substance of tax laws in the given situation and if the use of solutions of this kind is "artificial". The Act requires certain circumstances to be taken into account when deciding whether a solution was in fact artificial or not. The first thing to consider is whether the solution in question is not excessively complex. For