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Oct. 1— Under pressure from the European Commission, the Polish Finance Ministry has hurried out a notice to confirm its plans to implement legislation by the end of 2016 to facilitate exchange of tax information within the European Union, explaining delays are due to the “scope and complexity” of the new regulations.
The rules in question, European Council Directive 2014/107/EU, aim to combat tax evasion and tax fraud by bringing interest, dividends and gross proceeds from the sale of financial assets and other income into the scope of information exchange between EU member countries.
Poland missed the obligatory Jan. 1 deadline by which member states were expected to implement the directive.
Its explanation came after the European Commission issued a “a reasoned opinion” Sept. 29—sometimes also known as the “Yellow Card” procedure—giving a two-month deadline by which it is expected to inform the Commission of “all the necessary measures to fully transpose the Directive into national law.”
The commission also threatened to take the country to the European Court of Justice, as a last resort.
“Poland strongly supports all actions aimed at improving the cooperation between countries and jurisdictions in the scope of the exchange of information in tax matters,” the press department of the Finance Ministry told Bloomberg BNA in a Sept. 30 e-mail.
“It is crucial and a very important element to combat the international tax evasion and fighting against tax havens. We believe that in the near future all work concerning implementation of the Council Directive 2014/107/EU on mutual assistance in the area of income and capital taxation into the Polish domestic legal system will be finalized.”
According to the press department, the draft legislation has been prepared. Public and intergovernmental consultations on the draft are expected to be concluded within a few weeks. The draft will be submitted to Poland's parliament once it is accepted by the country's Council of Ministers, the decision-making body of the Polish government.
A European Commission source told Bloomberg BNA in a Sept. 30 telephone interview that member countries are supposed to adopt and publish the necessary measures to comply with the directive by the end of 2015 and that these measures should have been communicated to the commission, which Poland didn't do.
As a result, the commission sent a letter of formal notice to Poland Jan. 27. In March, Poland indicated it was working on the required changes. The source said there has been no communication from Poland since.
Portugal is understood to be the only other country that has not yet transposed the law.
“But they have been in contact with us and have provided information on their progress,” the source said.
According to Poland's finance ministry press department, the implementation has been delayed because of “procedural constrains.”
The ministry explained that the draft legislation covers issues beyond the provisions implementing Council Directive 2014/107/EU.
“It is a fully new piece of legislation which concerns all aspects of exchange of tax information, in particular implementing Council Directives 2015/2060, 2015/2376 and 2016/881, which should be transposed into the Polish system by the end of this year.
“That's why, because of the scope and complexity of the regulation, the legislative process involving long analysis and consultations was time-consuming and caused some delays.”
In a Sept. 30 telephone interview, Weronika Missala, a senior manager on the international tax team at PwC Poland, told Bloomberg BNA the government is trying to do too much in too little time.
“What we think is that they had other projects and other changes to be implemented in the meantime, and that's the reason simply,” she said. “We don't see any political or any real political purpose for not implementing it.”
One project that may have taken a higher priority concerns changes to the corporate income tax, set to be introduced from Jan. 1, Missala said.
But are a slew of other high-profile projects the government has been pushing this year, including recently proposed sweeping changes to a trio of Polish laws to fight value-added tax fraud, tax on the Polish retail sector—now suspended pending a European Commission investigation—and a major reorganization of a key finance ministry department to facilitate better handling of transfer pricing and general anti-avoidance rule (GAAR) cases, according to local tax practitioners.
It also doesn't help that Poland's finance minister, Pawel Szalamacha, was sacked Sept. 28 and replaced by Mateusz Morawiecki, who is now responsible for both the ministry of development and the ministry of finance.
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Directive 2014/107/EU is at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0107&from=EN.
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