Poland

  1. In your jurisdiction, what are the legal bases for eliminating double taxation further to a transfer pricing reassessment (European Arbitration Convention, mutual agreement procedures provided for by tax treaties)? In addition to the procedures set forth by such tax treaties, is there any other (formal or informal) domestic procedure in your jurisdiction?
  2. In addition – as the case may be – to the European Arbitration Convention, did your jurisdiction sign tax treaties with other States including an arbitration procedure? If yes, can you give the list of such States?
  3. In your experience, in your jurisdiction, how long does it take generally to eliminate the double taxation under the European Arbitration Convention and/or mutual agreement procedures set forth by tax treaties (and/or the domestic procedure if it exists)?
  4. In your jurisdiction, what are the starting point and time limit to initiate a procedure to eliminate double taxation resulting from a transfer pricing reassessment?
  5. If a reassessment is issued by your tax authorities, which State must receive the application for the international procedure to eliminate double taxation 1 The terms "international procedure to eliminate double taxation" mean the European Arbitration Convention or a mutual agreement procedure set forth by a tax treaty. (your State? the other State concerned? both States?)
  6. What are the formal conditions to initiate an international procedure to eliminate double taxation? Is there a list of documents to provide? To which department of the tax authorities (name, address) must the request be sent?
  7. In which cases would the competent authority of your jurisdiction refuse to engage/participate to the international procedure to eliminate double taxation?
  8. Is tax collection suspended during the procedure?
  9. Assuming the procedure results in an agreement on a way to cancel double taxation, how is generally such agreement implemented in your jurisdiction?
  10. In your jurisdiction, is it possible to engage concomitantly an international procedure to eliminate double taxation and litigation in front of courts? If yes, is it necessary at some stage to abandon the litigation in order to conclude/finalize the international procedure?

As a European Union member, Poland applies the European Arbitration Convention. As a consequence, depending on the case, the taxpayers can either rely on the European Arbitration Convention or mutual agreement procedures provided for by Double Tax Treaties (hereinafter “DTTs”).

Furthermore, the Polish tax authorities before opening a mutual agreement procedure (hereinafter “MAP”) have to determine if the double taxation can be avoided by local measures.

2. In addition – as the case may be – to the European Arbitration Convention, did your jurisdiction sign tax treaties with other States including an arbitration procedure? If yes, can you give the list of such States?

Most of the DTTs include the arbitration clause (usually section 9.2). The DTTs with the following states do not include the arbitration clause: France, China, Greece, Israel, Japan, Russia, Switzerland, the US, Hungary, Italy.

3. In your experience, in your jurisdiction, how long does it take generally to eliminate the double taxation under the European Arbitration Convention and/or mutual agreement procedures set forth by tax treaties (and/or the domestic procedure if it exists)?

To the best of our knowledge, in Poland, at the end of 2013, there were around 10 pending cases under the European Arbitration Convention and 40 pending cases under tax treaties. However, according to the Polish local regulations on MAP, the procedure should not take more than two years.

4. In your jurisdiction, what are the starting point and time limit to initiate a procedure to eliminate double taxation resulting from a transfer pricing reassessment?

Taxpayer should file application to initiate the procedure within three years from the protocol or decision on reassessment of the tax authorities which will or may lead to double taxation. The same time limit is provided for most of the DTTs signed by Poland, except for treaties signed with the United Kingdom (which extends it to six years) and Italy (which limits it to two years).

It seems that it is advisable to file the application as soon as possible, because parallel to the procedure, the taxpayer should challenge the reassessment in front of the tax authorities’ higher instance. Opening the procedure will make additional pressure on the tax authorities to take into account the argumentation of the taxpayer.

5. If a reassessment is issued by your tax authorities, which State must receive the application for the international procedure to eliminate double taxation 1 The terms "international procedure to eliminate double taxation" mean the European Arbitration Convention or a mutual agreement procedure set forth by a tax treaty. (your State? the other State concerned? both States?)

The taxpayer should file the application with the Polish tax authorities and the Polish tax authorities should notify the other State’s tax authorities.

6. What are the formal conditions to initiate an international procedure to eliminate double taxation? Is there a list of documents to provide? To which department of the tax authorities (name, address) must the request be sent?

The application should include:

  • Contact details of the Polish taxpayer and the related entities concerned;
  • Description of the situation;
  • Indication of the tax year concerned;
  • Copies of relevant decisions/protocols;
  • Information on appeal procedure initiated by the taxpayer;
  • Identification of the legal basis of application (in particular Article 4 of the Convention);
  • Statement confirming the commitment to disclose any documentation and information relevant in the proceeding.

The application should be filed with the Polish Ministry of Finance (ul. Świętokrzyska 12, 00-916 Warszawa)

7. In which cases would the competent authority of your jurisdiction refuse to engage/participate to the international procedure to eliminate double taxation?

Only if the formal criteria was not met.

8. Is tax collection suspended during the procedure?

No.

9. Assuming the procedure results in an agreement on a way to cancel double taxation, how is generally such agreement implemented in your jurisdiction?

The tax law is not clear on the implementation. The agreement between tax authorities should provide for the method to eliminate double taxation.
There is no legal basis to claim penal interest, but taking into account the logic of this system interest should be due.

10. In your jurisdiction, is it possible to engage concomitantly an international procedure to eliminate double taxation and litigation in front of courts? If yes, is it necessary at some stage to abandon the litigation in order to conclude/finalize the international procedure?

No.