Polish President approved a draft legislation introducing a general ant avoidance rule (GAAR) into the Polish Tax Law. On June 14, 2016, the clause was published in the official Journal of Laws and came into force as of July 15, 2016. GAAR shall apply to all types of taxes and shall preclude a taxpayer from obtaining a tax benefit as a result of artificial transactions.

According to the act, legal transactions with the main purpose of obtaining a tax advantage (defined very broadly, e.g. including also tax deferral) contrary to object and purpose of the tax regulations, shall not result in tax benefit.

The above regulations stipulate that if tax authorities detect artificial transactions designed mainly to gain tax benefit, tax consequences of such transactions will be assessed as if alternative ‘appropriate’ transaction had taken place. What is more, if transactions carried out by a taxpayer do not have any real economic or business rationale other than tax avoidance, tax authorities may completely disregard them. The transactions shall be deemed as artificial if they would not be carried out by a taxpayer acting in reasonable manner and whose objectives are not contrary to the purpose of the tax law. GAAR clause will be applied to transactions of anti-avoidance character, resulting in tax benefits exceeding 100,000 zloty (PLN).

The new regulations came into force on July 15, 2016. According to the act, GAAR clause is applicable to transactions carried out before the GAAR provisions come into force in case the tax benefit is achieved after the new law is introduced.