On 14 November 2019, Poland published the Law of 26 October 2019 on resolution of disputes over double taxation and the execution of advance pricing agreements (the “Act”), which generally entered into force on 29 November 2019.
The law transposes the solutions contained in Council Directive (EU) 2017/1852 of 10 October 2017 on mechanisms for settling tax disputes in the European Union into the Polish legal system. This includes rules for the effective resolution of disputes concerning the interpretation and application of bilateral tax treaties and the Arbitration Convention of the Union, in particular disputes leading to double taxation. The measures in the Directive apply in Poland to disputes relating to income or assets received in tax years beginning after 31 December 2017.
The Act also includes new provisions for the conclusion of Advance Pricing Agreements (APAs), which repeals the existing provisions on APAs in the Tax Code (Section IIA). The new APA provisions are similar to those in Section IIA although in addition to the acceptance of applications from domestic Polish companies, applications may also be accepted from natural persons and non-resident legal entities intending to set up a related business with operations in Poland. It introduces a time frame (the procedure should, in principle. last from 3 to 5 years from the moment of filing an application to initiate it), and an institutional framework and rules for accepting and examining an application initiating a mutual agreement procedure.
