Reporting of tax schemes - how and when to make them?

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The obligation to provide information on the tax scheme is a reporting obligation. Thus, and importantly, it may apply to situations where the arrangement does not constitute a form of tax avoidance. The reporting obligation may arise in connection with the use of tax reliefs and preferences consistent with the legislator's purpose. Reporting tax schemes means that many people do not know whether their reconciliations should be reported. The lack of an immediate reaction of the tax authorities to the information provided about the tax scheme does not mean that it will not be questioned in the future. Taxpayers do not know how and when to report, who is to do it and whether they really should. Hence, there are a number of problems with the fulfillment of the reporting obligation. We will try to answer the problems related to reporting tax schemes.

How to fill in the gaps after calling the Head of KAS?

Reporting tax schemes is a new obligation, therefore, there may be gaps in the information provided. In the event of such deficiencies, the tax authority will ask us to supplement them. In such a case, we must send the MDR document by e-mail, which is a supplement to the requested document. In order to supplement the original MDR document, a free tool prepared by the Ministry of Finance is available. In this case, select in turn:

  • the option "Create document",

  • the option "Submitting a supplement to the document",

  • the type of information / notification to be completed and the "Next" option,

  • option indicating the version of the so-called the schema according to which the supplement is to be made and the "Next" option,

and complete the information / notification. We do this through the MDR.GOV website. In the submitted document, the Unique Identifier of the completed document should be indicated (it can be found in the received Official Receipt Certificate). When completing the document, please complete all mandatory fields. Thus, the information contained in the fields filled in in the primary information should also be included in its supplement.

Can the taxpayer check whether a given tax scheme is already a notified standardized scheme and whether it has been assigned an NSP number?

There is no list of standardized tax schemes kept by the Ministry of Finance. Therefore, the taxpayer cannot check whether the scheme has already been notified. Thus, if the submitter is not aware of whether a given standardized scheme has already been submitted and has been assigned a NSP, it should submit MDR-1 as if it were a "new" scheme. On the website of the Ministry of Finance, we can check the status of a given NSP. In order to check it is necessary in turn:

  • select the option "Check NSP status",

  • enter the NSP number in the "NSP number" field,

  • select the "Check" option.

After performing the above steps, we will be informed whether the NSP is correct and valid or correct and invalidated. If you enter a correct number for which the status has not been changed yet, you will read the message "NSP number in the process of processing".

If submitted by the MDR-1 promoter, does the user always have to submit the MDR-3 information for the complex schema?

In such a situation, the user does not always have to submit the MDR-3 information. He does it only when, in a given settlement period, he performed any activities that are part of the tax scheme or obtained the resulting tax benefit. So, if the promoter provided information about the MDR schema but the user did not use it, it does not need to submit the MDR-3 information. Moreover, it may refrain from submitting information where, on the basis of its knowledge and knowledge of the facts, it concludes that the reconciliation is not a tax scheme and its sole purpose was economic benefits. The user should have full knowledge of the arrangement and its effects, so that reporting tax schemes is not necessary and can be dispensed with.

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Does not receiving the NSP within 7 days mean that we are not dealing with a pattern?

In the case of reporting the scheme and sending the MDR-1 information, the entity should receive the assigned NSP within 7 days. In practice, this is not always the case. Failure to send the NSP within 7 days does not mean that the arrangement described in the information provided on the tax scheme does not meet the conditions for being considered a tax scheme within the meaning of Art. 86a § 1 point 10 of the Tax Code. We must remember that the receipt of the confirmation of posting the NSP only indicates that from a formal perspective, the information on the tax scheme provided meets the requirements for this information.

Does everyone have to report the scheme if there are more promoters?

If we have more than one promoter, then if one of them provides MDR-1 information, the rest are exempt from reporting. The exemption applies on condition that the other promoters are indicated in this notice and informed in writing about the NSP of this tax scheme, with the confirmation of posting the NSP. If the tax scheme does not yet have the NSP, these entities should be informed of this fact in writing and the data on the tax scheme should be provided to them.

Example 1.

The law firm, together with an independent lawyer, provides complex tax advisory services to its user client. As part of the provision of these services, it provides the client with a tax scheme.

In such a situation, the statutory obligation to provide MDR-1 information rests with the law company and the partner (lawyer) having the status of a promoter. For the fulfillment of the obligation, it will be sufficient that the information on the tax scheme is provided by the company, and the partners will be indicated in this information and informed in writing about the NSP of this tax scheme.

Active regret in the event of failure to meet the information obligation on time

Let us remind you that the perpetrators of fiscal crimes and offenses can avoid punishment by using the so-called active regret.

Example 2.

The promoter did not submit the MDR-1 information on time. After a month, he noticed his mistake and decided to fix it by reporting the diagram. However, the promoter is afraid of the penalty for being late.

In the event of failure to provide information or notification to the Head of KAS on time, the promoter may submit the so-called active regret on the basis of the provisions of the Act of September 10, 1999 - Penal Fiscal Code. The submission of an active regret requires compliance with the conditions specified in this Act, i.e. providing the relevant circumstances of the offense and the fulfillment of the information obligation.

Can MDR documents be signed by a person authorized to sign declarations submitted electronically?

In the case of information on tax schemes, the provisions on the power of attorney in Chapter 3a, Section IV of the Tax Ordinance shall apply. Thus, the provisions on signing the declaration by representatives (section III, chapter 9a of the Tax Ordinance) do not apply here. Therefore, in order for the attorney to sign the information, he or she must have a power of attorney.

Example 3.

The taxpayer uses the services of an accounting office that keeps his books, and is also authorized to send tax declarations. Can the authorized person on the UPL-1 form also sign the MDR-1 information?

As we have already shown above, this is not possible. However, the person representing the office will be able to sign the information provided that he has the appropriate power of attorney.The attorney may replace the entity obliged to submit information or notifications regarding tax schemes on the basis of a general or specific power of attorney. The power of attorney should indicate the Head of the National Revenue Administration as the body to which the power of attorney is submitted. A special power of attorney is granted in the form of a special power of attorney (PPS-1) and submitted in writing (in person or by post) or in the form of an electronic document (signed with qualified electronic signatures or trusted signatures).

When reporting tax schemes, we encounter a number of problems. Some of them can be quickly solved and fixed our mistakes. Of course, in practice, further problems will emerge, the solution of which may be very complicated. Providing information on tax schemes is a difficult process, usually involving several entities, which makes it even more difficult.