Recently we wrote about the planned implementation of the Cooperation Programme, under which selected taxpayers would be given the opportunity to cooperate with the head of the National Treasury Administration on a permanent basis. This cooperation would, among other things, enables taxpayers to reach decisions on tax strategy in consultation with the authority competent for verifying the correctness of the taxpayer’s settlements. Until 26 May 2020, taxpayers may submit comments and suggestions to the Ministry of Finance on selected documents relevant to the programme.
We wrote about the planned introduction of the Cooperation Programme in the article “(R)evolution in dealings between taxpayers and tax authorities.”
The details of the programme are still being refined. In the course of the work, draft documents regarding the Cooperation Programme were published at tax.gov.pl:
- Guidelines for the Internal Tax Supervisory Framework
- Handbook for participants in the Cooperation Programme, including annexes:
- Open-ended catalogue of tax risks developed for the needs of an independent audit of the tax function
- Practical guide on sampling methods in tax audits and independent audits of the tax function under the Cooperation Programme
- Open-ended catalogue of events subject to reporting under the Cooperation Programme.
A report on tax consultations on the rules of functioning of the Cooperation Programme is also available.
Currently, through 26 May 2020, taxpayers can submit comments and suggestions on the draft documents.
Guidelines for the Internal Tax Supervisory Framework
This document is a set of general, although numerous, requirements for processes and procedures related to the execution of tax obligations imposed on the participants in the programme. They constitute a basis for considerations on building a tax compliance system and tax corporate governance in companies.
The guidelines are addressed to large taxpayers who are to be included in the Cooperation Programme.
However, in many respects, the guidelines provide content that is universal enough to offer useful guidance for a wider range of taxpayers in the future, in particular those conducting business on a wider scale. The guidelines can be used as a starting point for discussions on how to build a tax compliance system and how the authorities may perceive the distribution of tax risk within capital groups and allocate personal risk to individuals managing the company’s financial affairs.
This can also be seen as a favourable development due to the greater predictability of the authorities’ arguments in the event of disputes focusing on risk management. On the other hand, there is a concern that standards designed for large entities will be treated by the authorities as universal guidelines, strengthening regulatory pressure on smaller taxpayers.
Handbook for participants in the Cooperation Programme
The handbook is intended to build knowledge of the Cooperation Programme and systematise institutions that have not been regulated in detail, so as to ensure their uniform application. The document addresses numerous aspects related to joining the Cooperation Programme and its proper functioning.
The handbook also clearly explains that the taxpayer’s obligations described in the guidelines only give a foretaste of the organisational burden on the taxpayer. The document contains a more detailed description of the audit principles, reporting, and the scope of supervisory activities on the part of the head of the National Treasury Administration.
In view of the numerous regulations on taxpayers’ obligations, putting ourselves in the role of the taxpayer we would expect to supplement the handbook with a collection of best practices in the field of tax agreements. In many cases, such an agreement may constitute a major advantage resulting from participation in the programme.
- The open-ended catalogue of tax risks developed for the purposes of an independent audit of the tax function consists of two parts.
The first part deals with the risk of regular compliance with tax obligations. The catalogue includes examples of risks related to CIT, VAT, PIT, financial transaction tax (PCC), and excise tax.
The second part deals with organisational risk. The catalogue covers potential defects of the risk management system, internal control and internal audit, and deficiencies in ensuring compliance of the operations with legal provisions and internal regulations.
- The practical guide on sampling methods in tax audits and independent audit of the tax function under the Cooperation Programme is a tool addressed primarily to auditors who will conduct audits of taxpayers. The guide may provide some assistance with regard to sampling methods to be used as part of tax audits.
- The open-ended catalogue of events subject to reporting under the Cooperation Programme serves to identify significant events that will require reporting. The catalogue is extensive, but only provides examples. The draft handbook indicates that a taxpayer who is uncertain whether a given event is subject to reporting may consult a contact person on the side of National Treasury Administration.
Wojciech Marszałkowski, attorney-at-law, Michał Nowacki, attorney-at-law, tax adviser, Tax practice, Wardyński & Partners