Academic Scientific JournalsNew Tax Reality for Permanent Establishment of Foreign Enterprises in Poland in a Post-Beps Era
Keywords:
permanent establishment, Polish tax authorities, BEPS Action 7, MLI, double tax treaty, Poland, tax avoidance, tax ruling, commissionaire arrangements, activities of auxiliary or preparatory character, splitting-up of contractsAbstract
The main aim of this contribution is to make a review and assess the application of BEPS Action 7 recommendations by the tax administration in Poland when determining whether a non-resident enterprise operating in Poland should be considered to have a permanent establishment (PE). The creation of a PE is crucial for taxable presence in Poland and for identifying the scope of the allocated revenues and expenses (taxable income). Changes to the OECD Model have a genuine practical impact on multinational enterprises and tax administrations and thus they need to be closely examined. The considerations serve to prove the hypothesis that Polish tax authorities apply the recommendations of BEPS Action 7 despite the fact that Poland lodged reservations concerning the non-application of Art. 12-14 of the MLI in its entirety. Beyond the legal-dogmatic research the contribution refers directly to the results of an empirical study carried out by the authors in the course of which 88 individual tax rulings issued by the Polish tax authorities were identified and examined.
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References
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Court rulings
Supreme Court (NSA) ruling of 8th November 2018, II FSK 3718/17 (https://orzeczenia.nsa.gov.pl).
Provincional Court in Warsaw (WSA) ruling of 28th January 2020, III SA/Wa 696/19 (https://orzeczenia.nsa.gov.pl)
Provincional Court in Gliwice (WSA) of 26th November 2021, I SA/Gl 1035/21 (https://orzeczenia.nsa.gov.pl).
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OECD: Preventing the Artificial Avoidance of Permanent Establishment Status, Action 7 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015.
OECD: Model Tax Convention on Income and on Capital: Condensed Version, OECD Publishing, 2017.
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OECD: Additional Guidance on the Attribution of Profits to Permanent Establishments. BEPS Action 7, OECD Publishing, 2018.
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Schwarz Jonathan, Permanent Establishment: La lutte continue, Kluwer Tax Blog. Available at: http://kluwertaxblog.com/2017/07/24/permanent-establishment-la-lutte-continue/, accessed: 14th July 2022.
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