SCC examined the activities of the Ministry of Finance, five of the 16 fiscal control offices, five of the 20 specialized tax offices in five provinces and the Government Legislation Centre in the supervision over the correctness of the accounts of companies with foreign capital from the Polish tax authorities. The audit covered the period from 1 January 2012. Until 30 June 2014.
The results are not encouraging. It turns out that the tax authorities can not cope with controlling these companies.
Marne prepare the IRS
According to NIK tax authorities and tax inspection were not properly prepared to carry out checks correctness of settlement of the state budget entities with foreign capital.
– There was only a few checks to verify the legality of the transfer of income by business entities – Chamber assessed in the report.
– Control of the companies operating on an international scale was not much, because Treasury officials focused on the fight VAT irregularities. The reason for insufficient action was the lack of tools to bet on companies to control and analyze their activities and insufficient preparation staff to study the difficult substantive issues – comments Pawel Biedziak, a spokesman for SCC.
The Chamber also draws attention to the lack of or limited access comparative databases that would enable an assessment of whether prices used in transactions between related parties differ from market values.
NIK report shows that fiscal control offices control proceedings in companies with foreign capital accounted for 26, 9 percent. all completed proceedings regarding corporate tax (CIT). – Nominating the control of such companies assumed the same criteria as for other entities, it is whether an operator acted with the participation or without the participation of foreign capital – Chamber notes. It calculates that 370 completed proceedings control in companies with foreign capital transfer pricing has been studied in 78, and other forms of optimization in 13 proceedings. Irregularities relating to transfer pricing, which is used in settlements between the companies related to each other, established in every third proceedings in which this issue was investigated and optimized in every second. According to NIK to the small number of proceedings in respect of transfer pricing and other forms of optimization to have an impact, inter alia, longevity proceedings justified primarily controlled by the complexity of the issues and collecting voluminous evidence. The audit revealed depletion in CIT amounting to almost 1.5 billion zł, including 1.3 billion zł in companies with foreign capital. The tax offices it looked even worse. The audit disclosed herein CIT depletion in the amount of 30.8 million zł, including the amount of 19.6 million zł in companies with foreign capital.
How many lost budget?
It is not known what is the scale of the losses of tax revenue caused by the departure abroad. NIK does not give an answer. In her report, we find this opinion: – It is difficult to reliably assess the level of losses resulting from harmful tax avoidance in Poland, but on the assumption that in the Czech Republic in 2011. These losses were estimated at about 8.5 billion zł, it’s hard to imagine that in Poland was lower. “
SCC notes that in Poland, in the years 2008-13, the ratio decreased revenues from corporate income tax (CIT) to the gross domestic product: from 2.72 per cent . in 2008. and 2.29 per cent. in 2009. to 1.79 per cent. in 2013.
– was the result of deterioration in the business environment and reduce the profitability of operators. The decline could also be caused by dissemination activities aimed at avoiding or tax evasion – The Chamber notes.
Also effective tax rate, calculated as the ratio of the amount of tax due to the tax base, for legal entities in 2013. was lower than in previous years and amounted to 17.04 per cent., while in 2012. – 17.29 per cent., in 2011. – 17.37 percent. For companies with foreign capital participation rate it was lower and amounted to 16.26 per cent. in 2013., 16.87 per cent. in 2012. and 16.83 per cent. in 2011.
– Effectively percentage of the taxable entities Companies with foreign capital was lower than for other taxpayers CIT by 0.83 points. percent. in 2011., 0.64 pts. percent. in 2012., and 1.22 points. percent. in 2013. – lists the Chamber.
Minister starts to fray
NIK also noted, however, that of 2014. Work on sealing Polish tax system and the elaboration of approaches units subordinate to the Minister of Finance to control those making income transfers have accelerated.
– The Minister of Finance has identified risks related to the settlement of income tax by companies with foreign capital and prepared the legislative changes aimed at eliminating the mechanisms of aggressive tax planning – underlined the Chamber. – Changes aimed at limiting the reduction in the tax base for income tax and income transfers outside the Polish tax system is consistent with the solutions recommended by the authorities of the European Union and the Organisation for Economic Cooperation and Development – he added.
It is all about the law on tax havens. The Act is intended to make that Polish companies will pay tax at us (both PIT and CIT) is also on the income they controlled foreign companies operating not only in tax havens, but also countries with more favorable taxes than Poland. Such revenue is to be subject to the normal tax rate – 19 percent. As a result of an error officials, stuck it in the queue to be published in the Official Gazette, has not been announced at the time and was the threat that it will take effect from this year, contrary to the intentions of the government and parliament.
– In the opinion of NIK ad by the President of the Government Legislation Centre Act on havens in breach of the law, which states that legislative acts shall be announced immediately – says Paweł Biedziak. The Chamber considered that responsibility for ad-delayed bill bears the president of the RCL.
NIK also praised the amendment of the provisions which made that from the beginning of 2014. CIT income tax were taken limited joint-stock companies, which have so far over the years could legally avoid payment of that tax. The Ministry of Finance alarmed by the rapidly growing number of such companies. In 2003. There were 19, in 2011. – In 1548 and in the first half of 2012. – 2100. Resort has come to the conclusion that the sole or decisive role in deciding on the assumption SKA plays the attractiveness of such preferential method of taxation. And domknął the gate.
Acute shortage clause
In its report, the SCC notes, however, that , with the Polish tax system still does not have a general clause against tax avoidance. – Clause this legal solution is applied to taxpayers making fictitious economic activities and create artificial legal constructions that have them bring significant tax benefits. Negative phenomenon of tax avoidance exists in every country of the market economy and a general clause is one of the most common ways to combat this phenomenon in developed countries. The introduction of the clause is recommended by the European Commission and the OECD. In many countries (eg. France, Germany, Ireland, Sweden, Canada) solution introducing a general clause against tax avoidance function for many years – explains Chamber.
He admits that the Minister of Finance has prepared a draft legal solutions that allow the introduction of a general clause against tax avoidance, however, addressed in the June 2015 year to the Parliament a draft amendment to the Tax Law – clause against tax evasion has been disabled. This was probably because the government feared during election campaigns entrepreneurs allegations that it is preparing a tool that threaten them carried out by legitimate interests.
– We are working on a general clause, which is to counteract tax avoidance and to allow us to Today legal action to challenge taxpayers whose sole purpose is to circumvent tax – said in December last year in an interview with “Election” Deputy Finance Minister Janusz Cichon.
Businesses fear, however, a clause like the plague. They argue that the tax authorities may abuse it against them. This assured, however, that clause is to concern only the biggest cases, large companies, and that the proceedings covered by it will be several, the top ten of the year.
Finally, legislation introducing a clause to the Ministry of Finance wants to enter the draft of the new Tax Code, on which Special working commission of experts. The problem is that the new law will come into force at the earliest in 2017.
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