End of Domestic MDR Reporting as of October 1, 2026 – The President Signed the Amendment to the Tax Ordinance

At the end of June 2026, the President signed the long-awaited amendment to the Tax Ordinance. The amendment introduces the most significant changes in years to the tax scheme reporting rules (MDR). A change eagerly anticipated by many taxpayers is the abolition of the obligation to report domestic tax schemes. 

Although most of the provisions take effect on October 1, 2026, businesses should already begin assessing how the new regulations will impact the tax and compliance procedures in place within their organizations.

Why Are the MDR Regulations Changing? Simplifying Tax Scheme Reporting

The tax scheme reporting rules were introduced into the legal system on January 1, 2019, as part of the implementation of the DAC6 Directive. Unfortunately, the Polish legislature decided to impose obligations on taxpayers that went far beyond those required by the EU directive, a move that has drawn criticism from taxpayers for years.

The amendment to the regulations is intended to reduce these burdens by simplifying the MDR system and focusing it on cases that actually require reporting under European Union law.

Although the goal of the changes is to reduce administrative burdens, businesses should not assume that MDR obligations will disappear entirely. Reporting on cross-border schemes remains in effect, and the proper classification of such arrangements will still require a case-by-case analysis of the regulations.

Elimination of the Obligation to Report Domestic Tax Schemes Under the MDR

One of the key changes introduced by the amendment to the Tax Ordinance is the abolition of the obligation to report domestic tax schemes. This marks a departure from the previous, broad MDR model, which also covered arrangements that did not extend beyond the territory of Poland.

The reporting obligation is essentially limited to cross-border tax schemes involving more than one European Union member state or a member state and a third country.

Importantly, however, that under the amendment, it is not necessary for entities involved in the tax scheme to have their registered offices or places of management in different countries for a tax scheme to exist.

It is sufficient that: (1) at least one participant in the arrangement carries on business in another country (without having either a registered office or a permanent establishment there), and (2) the arrangement relates in some way to that other country.

What does this mean in practice? 

Taxpayers will no longer be required to consider whether their domestic passenger car lease constitutes a tax scheme, and other domestic transactions i.e. involving rights that are difficult to value – such as contributions of trademarks – may also be exempt from reporting.

A narrower list of MDR identifying features – fewer cases requiring reporting

Another positive change is the removal of the so-called “other specific hallmarks” from the tax scheme reporting rules. Previously, their broad definition meant that even transactions of minor significance from the perspective of combating aggressive tax planning could be subject to the analysis and reporting requirements. Narrowing the list of MDR hallmarks should reduce the number of cases requiring detailed analysis.

What arrangements might consequently no longer be subject to the reporting requirement?

• A dividend payment to a foreign shareholder exceeding the statutory value threshold – currently, such a payment may be subject to MDR analysis solely on the basis of “other specific hallmarks.” After the changes, the amount of the dividend itself will not trigger a reporting obligation (though an obligation may arise if a generic or specific hallmark occurs).

• Payment of interest to a foreign entity (e.g., within a corporate group) where the sole basis for reporting is exceeding the thresholds set for other specific hallmarks – such cases are to be exempt from reporting (though the arrangement may still constitute MDR if any other MDR hallmark occurs).

Changes to MDR reporting obligations and protection of professional secrecy

Another significant change is the merging of the previously separate roles of advisor and facilitator. The legislature has simplified the list of entities subject to MDR obligations, which is intended to facilitate the identification of those responsible for fulfilling reporting obligations and to reduce uncertainty regarding the assignment of specific roles to participants in an arrangement.

At the same time, the amendment takes into account CJEU rulings, according to which MDR regulations should not affect obligations regarding professional secrecy. Consequently, attorneys-at-law, legal advisors, tax advisors, and patent attorneys will be exempt from the reporting obligation if submitting an MDR would result in a breach of their professional secrecy. 

Nevertheless, representatives of these professions will be required to inform their clients of the obligation to report any such scheme.

The amendment also eliminates the requirement to have an MDR procedure in place. Nevertheless, experience shows that having such a procedure in place can, in many cases, protect businesses from violating their reporting obligations.

Other changes to the MDR: authorized representative and individual interpretations

Once the amendment takes effect, one practical improvement will be the ability for a proxy to sign the MDR-3 form. Under the previous regulations, the taxpayer or a member of the company’s management board was required to sign in person.

The signature had to be in the form of a qualified electronic signature or could be provided using a Trusted Profile. These requirements sometimes significantly hindered the reporting of schemes by entities whose management board members were foreign nationals. Once the amendment takes effect, a member of a company’s management board will be able to grant power of attorney – for example, to their tax advisor – so that the advisor can sign the MDR-3 on behalf of the company.

The amendment also addresses one of the issues currently under dispute between tax authorities and administrative courts, namely the admissibility of issuing individual tax rulings regarding the MDR.

The tax scheme reporting rules (MDR) are generally considered by the tax authorities to be excluded from the system of individual tax rulings. However, according to administrative court case law favorable to taxpayers (e.g., the Supreme Administrative Court’s judgment of January 28, 2021), these regulations are subject to the tax ruling procedure. 

Unfortunately, against the backdrop of this dispute, the legislature decided to explicitly exclude the provisions concerning tax schemes from the permissible scope of applications for individual tax rulings. This change must be considered disappointing, given the purpose of the institution of tax rulings, which is to ensure taxpayer protection, including, in particular, legal certainty within the complex tax law system.

How to prepare your company for the MDR changes effective October 1, 2026?

Most of the changes will take effect on October 1, 2026, so it is worth analyzing now how they will affect your organization’s existing tax procedures and compliance processes.

The changes may result in fewer reporting obligations, but they also require a reassessment of which arrangements will still be subject to reporting and which procedures will remain necessary.

In practice, businesses should start by reviewing their existing MDR procedures, verifying the roles and responsibilities of those involved in identifying tax schemes, and updating internal documentation. 

It is also advisable to conduct training sessions for the tax, finance, and legal departments to ensure a consistent understanding of the new regulations. Particular attention should be paid to cross-border transactions, as these will remain the primary area subject to reporting requirements.

Preparing well in advance will help limit the risk of errors, reduce the costs of organizational compliance, and ensure the continuity of tax compliance after the amendment takes effect.

If you would like to assess the impact of the new regulations on your company’s operations or need support in adapting your MDR procedures, please contact us. We will help you analyze the regulations, identify areas requiring changes, and prepare your organization to comply with the new rules effective October 1, 2026.