MDR: new deadlines and modified reporting rules

On 30 June 2020 new Regulation of the Minister of Finance on the extension of certain deadlines related to transfer of information on tax arrangements and exchange of tax information with other countries (the MDR Regulation) entered into force.

The MDR Regulation also extends some of the deadlines set out in the Act of 28 May 2020 amending among others CIT and VAT Act, which entered into force on 1 July 2020 (the Amendment Act) and about which we wrote here.

Re-reporting of cross-border tax arrangements

  • Taxpayers are obliged to report again cross-border tax schemes if the so-called first activity was carried out in the period from 26 June 2018 to 30 June 2020.
  • The deadlines for fulfilling the obligation to re-report cross-border tax arrangements have been postponed by the MDR Regulation to:
    • 31 December 2020 – for promoters;
    • 31 January 2021 – for beneficiaries;
    • 28 February 2021 – for supporters; at the same time, the supporters will also be obliged to inform the promoters or beneficiaries that the arrangement constitutes a cross-border tax scheme.

Extension of reporting deadlines

The MDR Regulation also extends:

  • until 30 April 2021 – deadline for beneficiaries to provide information on the tax scheme MDR-3 – if within the period from 26 June 2018 to 31 March 2021 the beneficiary performed any activity that is a part of the cross-border tax scheme or obtained tax benefits as a result of it;
  • until 30 April 2021 – deadline for submitting the MDR-4 form – if within the period from 1 July 2020 to 31 March 2021 the promoter or supporter made available beneficiary a cross-border tax scheme to the;
  • until April 30, 2021 – deadline for the promotor or supporter to provide data on the beneficiary to the Head of the National Tax Administration (KAS);
  • deadlines for reporting cross-border schemes for the first time, i.e. when the reporting obligation arose or will arise by 31 December 2020 – reporting deadlines will start running from 1 January 2021.

The MDR Regulation also provides the extension until 31 July 2020 of certain deadlines related to the transmission and exchange of information on:

  • reported accounts (CRS) and
  • US reported bills (FATCA).

Reporting rules changes

The Amendment Act also introduced a number of changes in the area of ​​MDR:

  • Obligation to re-report cross-border tax schemes

If the so-called first activity related to the implementation of the tax scheme took place in the period from 26 June 2018 to 30 June 2020, promoters, beneficiaries, and supporters will be required to re-provide the Head of KAS with information on the cross-border tax scheme.

  • MDR numbers (NSP) issued before 1 July 2020 became automatically invalid
  • Reducing the MDR-3 signing requirements

The obligation to sign MDR-3 by all members of the management board or persons entitled to at least 10% share in the company’s profit in the case of partnerships has been canceled – the form may be signed in accordance with the rules of representation of legal persons by:

  • a person authorized by a foreign entrepreneur to represent him within a branch – in the case of a taxpayer who is a foreign entrepreneur with a branch operating in the territory of the Republic of Poland,
    • a person authorized to represent – in the case of other taxpayers.

Important: The MDR-3 form cannot be signed by the company’s proxies – the same as before the entry into force of the Amendment Act.

  • Change of the specific hallmark regarding payments to “tax havens”

In accordance with the Amendment Act, the tax scheme will also apply to transactions with entities from countries included in the EU list of tax havens, and not only in the case of transactions performed with entities from tax havens specified only in Polish regulations.

If you have any questions, please contact our experts:

Łukasz Bączyk
Head of Tax, Board Member

Jarosław Szajkowski
Tax Manager – Tax Adviser

Marta Skrodzka
Tax Manager – Tax Adviser

Piotr Szeliga
Tax Manager – Tax Adviser

Paweł Jóźwik
Tax Manager – Attorney-at-law

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