The Senate in Poland on 18th of October 2019, adopted an act, which enables some taxpayers to conclude a ‘cooperation agreement’ with the Head of the National Treasury Administration.
Cooperation agreement with the Head of the National Treasury Administration (NTA) in practice
The act on resolution of disputes regarding double taxation and the conclusion of advanced pricing agreements that introduces the cooperation agreement is currently awaiting the President's signature.The purpose of the cooperation agreement is to ensure the taxpayer’s compliance with tax law and, at the same time, increase transparency and mutual trust between the tax authority and the taxpayer.
The entrepreneur being a party to the cooperation agreement will have the opportunity to discuss with the Head of NTA important issues related to the tax settlements. Such arrangements may concern among others:
- interpretation of tax laws and the content of tax rulings,
- transfer pricing rules,
- the amount of advance income tax,
- or non-applicability of the general anti avoidance rule.
The cooperation agreement may provide the taxpayer with benefits such as: reduction (by half) of the fees for an advance pricing agreement and for a security opinion, as well as reduction (or, in some cases, even the lack) of interest on tax arrears. The cooperation agreement may also protect an entrepreneur against additional tax liability and the tax audit. Moreover, the customs and fiscal control of a taxpayer who is a party to the cooperation agreement will be carried out only by the Head of the NTA.
How to conclude a cooperation agreement?
An entrepreneur interested in concluding a cooperation agreement will have to meet some conditions (e.g. introduce a Tax Control Framework in the company).
By concluding the contract, the taxpayer will declare to voluntarily and properly fulfill duties and to report to the NTA all potentially controversial tax issues.
Conclusion of such an agreement will be preceded by a pre-audit carried out by the Head of the NTA.
Why is it worth considering concluding an agreement with the NTA?
A cooperation agreement may provide the taxpayer with some additional benefits.
- First of all, it may be an opportunity to minimize tax risk in a company.
- Secondly, it may enable the entrepreneur to initiate a constructive and transparent dialogue with tax authorities.
Preparation to conclude a cooperation agreement may take some time (i.e. requires to prepare for the pre-audit, introduce or verify the internal Tax ControlFramework). Therefore, it is worth considering taking steps in this direction right now.