Last updated: 05.02.2025
What is a Tax Strategy?
A tax strategy is a company’s structured plan for managing tax obligations, ensuring compliance with tax laws, and optimizing tax benefits. It defines how a business approaches tax planning, including:
- Internal processes and procedures that impact tax liability.
- Handling of transactions with related parties to align with corporate income tax rates and regulations.
- Reporting of business activities in tax havens to prevent tax avoidance concerns.
- Requests for tax rulings to clarify complex tax positions with tax authorities.
While disclosure of a individual taxation strategy enhances tax transparency, it may also lead to increased tax audits, particularly for companies involved in cross-border transactions or complex corporate taxation structures.
Tax Strategy Reporting in Poland – Who is obligated?
Since January 1, 2021, certain taxpayers are required to prepare and publish information about their implemented tax strategy to ensure tax transparency and compliance with Polish tax laws.
This obligation applies to:
- Tax capital groups subject to corporate taxation.
- Taxpayers with revenue exceeding EUR 50 million in the previous tax year.
- Each company within a tax capital group, regardless of individual taxable income.
What Information must be included in a Tax Strategy Report?
A tax strategy report ensures transparency in a company’s tax management and compliance with Polish tax laws. It provides an overview of key tax obligations, corporate restructuring, and interactions with tax authorities.
The required content includes:
- Description of tax management processes and procedures – How the company ensures compliance with income tax, corporate income, and VAT regulations.
- Details of tax obligations fulfilled in Poland – Including the number of MDR reports submitted to tax authorities.
- Information on related-party transactions – Ensuring tax planning strategies align with transfer pricing compliance.
- Disclosure of planned or undertaken restructuring activities – Such as mergers, acquisitions, and reorganizations affecting capital gains and tax liability.
- Applications for tax rulings and binding VAT rate information – Requests submitted to tax administrations for guidance on tax planning.
What are the Publication Requirements for a Tax Strategy Report?
Companies must ensure that their tax strategy report is publicly accessible and compliant with Polish tax laws. The key publication requirements include:
- Language – The report must be published in Polish or translated into Polish.
- Availability – It must be posted on the taxpayer’s website or, if unavailable, on a related entity’s website.
- Deadline – The report must be published by the end of the 12th month following the tax year.
What Are the Publication Rules and Consequences of Non-Compliance?
When publishing a tax strategy report, companies must balance transparency with the protection of confidential business data. The key requirements include:
- Confidentiality Protection – Information covered by trade, industrial, professional, or manufacturing secrecy does not have to be disclosed.
- Content Scope – The report should align with the company’s business operations, industry, and scale.
What Happens If a Company Fails to Publish the Report?
Businesses that do not notify tax authorities about the publication may be subject to financial penalties of up to PLN 250,000. This can result in increased scrutiny from tax authorities and potential compliance risks.
FAQ – Tax Strategy in Poland
Who is required to report a tax strategy in Poland?
The obligation to publish a tax strategy report applies to tax capital groups subject to corporate income tax and taxpayers with taxable income exceeding EUR 50 million in the previous tax year. Each company within a tax capital group must prepare a report, regardless of its individual income earned or adjusted gross income.
What information must be included in a tax strategy report?
The report must outline tax management processes, compliance with income tax, value added tax, and the number of MDR reports submitted. It should also cover related-party transactions, restructuring plans affecting capital gains, and applications for tax rulings regarding tax rates, tax deductions, and tax credits.
Additionally, it may include tax planning strategies, requests for binding VAT rate information, and disclosures of interest income, business owner activities, and expenses related to tax compliance.
What are the publication requirements for a tax strategy report?
The report must be published in Polish or translated into Polish. It should be accessible on the taxpayer’s website or, if unavailable, on a related entity’s website.
The deadline for publication is the end of the 12th month following the tax year. Compliance with payroll taxes, and personal income tax regulations is essential when preparing the report.
What are the consequences of failing to publish a tax strategy report?
Failure to publish the report can result in financial penalties of up to PLN 250,000. Non-compliance may lead to increased scrutiny from tax authorities and risks regarding tax liability, ordinary income, and adherence to tax code regulations. A company may also face challenges related to standard deduction, earned income, and potential adjustments to tax returns.
Does a tax strategy report require disclosure of confidential information?
The report must ensure transparency in tax planning but does not require disclosure of trade, industrial, professional, or manufacturing secrets.
What tax benefits can result from compliance with tax strategy reporting?
Proper tax strategy reporting helps businesses comply with tax regulations while optimizing tax burden. It may provide tax benefits such as eligibility for many tax credits, tax incentives, and reduced risks associated with property taxes, payroll taxes, and personal income tax.
How does tax strategy reporting impact a company’s tax burden and tax savings?
A well-structured tax strategy helps businesses manage their tax burden by optimizing tax deductions, tax credits, and available tax incentives. By ensuring compliance with income tax and corporate income tax regulations, companies can minimize financial risks and maximize tax savings.
Strategic planning may also reduce liabilities related to property taxes, payroll taxes, and medical and dental expenses, leading to improved financial efficiency.
Can tax strategy reporting affect a company’s taxable income and tax liability?
Yes, tax strategy reporting directly influences a company’s taxable income, as it requires detailed disclosure of tax planning activities, including capital gains, interest income, and business owner transactions.
Companies must ensure that all reported information aligns with tax rates, standard deduction policies, and adjusted gross income calculations to avoid unexpected increases in tax liability. Transparent tax reporting can also provide protection against penalties and audits from the internal revenue service and Polish tax authorities.
If you’re looking for tax advice regarding paying taxes and ensuring full fair market value, it’s essential to consult with a tax professional. They can assist with itemize deductions and provide guidance for high income earners to maximize their savings.
