MDR reporting by accounting offices - what is it?
MDR tax schemes (mandatory disclosure rules) are a new issue that has not existed in the Polish tax system so far. Importantly, MDR reporting has not yet functioned in other European Union countries. Thus, it may be a certain difficulty for taxpayers.
Why do we need to report?
MDR reporting results from EU regulations. The need to report MDR patterns was introduced by the provisions of Council Directive (EU) 2018/822 of May 25, 2018. In Poland, these provisions were introduced into the national system to a much greater extent than provided for by the above directive. Thus, our legislator decided that taxpayers will be obliged to provide more extensive reporting. On January 1, 2019, the act amending the act on personal income tax, the act on corporate income tax, the Tax Ordinance and some other acts entered into force, as a result of which Art. 86a – 86o (Chapter 11a - Information on tax schemes).
The introduced MDR provisions relate in particular to:
- determining the tax authority to which information on tax schemes will be sent,
- defining the definition of the tax scheme and reporting conditions,
- indication of the group of entities obliged to provide information,
- the method and date of reporting,
- the scope of reported information,
Accounting office - MDR reporting
The accounting office as the entity responsible for accounting and tax settlements of its clients may be required to report. Most often it will act as a promoter or supporter. In order to approximate the role of the accounting office, we need to recall the definition of a promoter and assistant.
The promoter is a natural person, a legal person or an organizational unit without legal personality, in particular a tax advisor, attorney-at-law, legal advisor, employee of a bank or other financial institution advising clients, also in the event that he does not have a place of residence, registered office or management board in the territory of the country ( Article 86a §1 points 7 and 8 of the Tax Ordinance), which develops, offers, provides, implements or manages the implementation of the arrangement. The definition of promoter is an open catalog containing, for example, the indicated professions of public trust. In addition to the group of professions of public trust mentioned in the definition, a promoter may also be another person performing activities falling within the scope of these persons or having similar qualifications. In the case of accounting offices, it very often happens that they propose (develop) solutions to taxpayers that generate measurable tax benefits. The scheme is offered and implemented. Then the above solutions are managed by tax offices.
The supporting person is a natural person, a legal person or an organizational unit without legal personality, in particular a person providing bookkeeping services (accountant), who, while maintaining the care generally required in the activities performed, taking into account the professional nature of the activity, the area of specialization and the subject of the activities performed, provide, directly or through others, help, support or advice in developing, marketing, organizing, making available for implementation or supervising the implementation of the arrangement. In this case, accounting offices are definitely more common.
The deadline for the preparation and reporting of MDR for non-cross-border tax schemes has been postponed - the end date of the period will be the 30th day following the cancellation of the epidemic threat and state of the epidemic announced in connection with COVID-19. There are also plans to extend the deadlines for reporting cross-border tax schemes.
In the first step, the assessment of the main benefit criterion requires determining how the tax benefit is defined under the MDR provisions. A tax advantage for MDR purposes is understood to mean:
- failure of a tax liability;
- postponement of the tax liability;
- lowering the amount of the tax liability;
- arising or overstating a tax loss;
- there is an overpayment or the right to a tax refund;
- overestimation of the overpayment amount;
- overestimation of the tax refund amount;
- no obligation to collect the tax by the payer, if it results from the failure to establish a tax liability, postponing the creation of a tax liability or reducing its amount;
- increasing the amount of the surplus of input tax over the due tax - within the meaning of the provisions of the Act on tax on goods and services to be transferred to the next settlement period;
- failure to establish an obligation or postponing the obligation to prepare and submit tax information, including information on tax schemes.
Under the MDR regulations, a tax benefit may also arise on the basis of tax regulations in force in countries other than Poland.
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The MDR regulations are related to sanctions in the provisions of, inter alia, KKS in the case of:
- failure to comply with disclosure obligations or failure to meet the deadline,
- using the revoked NSP number.
A taxpayer may be fined up to 720 daily rates when, contrary to the obligation:
- fails to provide the competent authority with information on the tax scheme or provides it after the deadline;
- does not provide the competent authority with data on entities to which the standardized tax scheme has been made available or transfers them after the deadline;
- being a beneficiary, does not submit a tax declaration on time for the period of using the tax scheme or obtaining a tax advantage, information about the tax scheme (Article 86j of the Tax Code);
- does not inform the entity obliged to submit the tax scheme in writing about this obligation or does it after the deadline;
- does not provide the entity obliged to provide the tax scheme with data on the tax scheme or does it after the deadline (Article 86f § 1 of the Tax Ordinance);
- does not inform in writing the entities obliged to provide information on the tax scheme that it does not provide information on the tax scheme or does it after the deadline;
- does not apply to the entity ordering the activities with a separate letter for a written statement that the arrangement does not constitute a tax scheme, or it does it after the deadline.
Moreover, the taxpayer is subject to a fine of up to 240 daily rates when using the invalidated NSP number.
Taking into account that the minimum wage in 2020 is PLN 2,600, the daily rate ranges from PLN 86.67 to PLN 34,668, while the fine ranges from PLN 866.70 to PLN 24,960,960 million. zloty.
In the case of a minor, in the above cases, the perpetrator is subject to a fine for a tax offense.
Thus, the penalties for not reporting MDR schemes are high.