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The Tax Practice has successfully represented a client in a dispute before the tax authorities over tax regulations on sham legal transactions being applied as if they were an anti-tax avoidance clause. The corporate income tax arrears amounted to over PLN 4 million.
The first instance tax authority found that the in-kind contribution of a trademark and the subsequent redemption of shares without remuneration were sham transactions and assessed income for the company that received the trademark of the market value of the trademark, deeming the donation of the trademark a transaction disguised as an in-kind contribution and share redemption. The authority considered the aim of the transactions to be tax optimisation.
As a result of an appeal against the first instance authority's decision drawn up by our Tax Practice experts, the director of the National Revenue Administration overturned the decision issued by the head of the tax office and discontinued the proceedings. This decision ends a protracted dispute with the tax administration authorities right at the administrative stage, without the taxpayer having to initiate legal proceedings, which has rarely happened in recent years.
By overturning the first instance decision, the tax authority upheld the arguments put forward in the appeal by our Tax Practice experts regarding the guidelines for applying the provisions on sham transactions (Article 199a § 2 of the Tax Code), inter alia, admitting that sham transactions do not constitute an anti-avoidance clause and cannot be applied to corporate resolutions.
The decision is extremely important not only for the client, but also for other taxpayers due to the evident trend among the tax authorities to apply the provisions on sham legal transactions as if they were an anti-tax avoidance clause, allowing arbitrary challenges to the effectiveness of selected legal transactions, in isolation from the legal framework of this institution and without the guarantees for the taxpayer that are provided by the application of such clause. It shows that this unfavourable practice, following the recent court judgments, is beginning to change in favour of taxpayers.
From 25 May 2018 the General Data Protection Regulation (GDPR) applies in Poland and other European Union countries. We would therefore like to give you several details on the subject of how DZP processes personal data.
The administrator of the personal data is Domański Zakrzewski Palinka Sp.k. (“DZP”; address: Rondo ONZ 1, 00-124 Warszawa). Data are processed for contact purposes and to impart information on changes to provisions and authority practices and on other issues, including events concerning day-to-day legal, economic and cultural issues, inter alia, by sending DZP newsletters. The above is carried out on the basis of legitimate interests, i.e. in accordance with art. 6(1)(f) of the GDPR. Data can also be processed where necessary for the conclusion or performance of a contract and for compliance with a legal obligation to which DZP is subject, i.e. pursuant to art. 6(1)(b) and (c) of the GDPR. Data can be transferred to entities with whose help DZP achieves the indicated aims, including entities maintaining IT infrastructure. Giving data is voluntary and in contractual relations is a requirement for concluding and performing a contract. It is possible to object to data processing, request access to, rectification and erasure of personal data or restriction of processing and data portability. Data are kept until an objection is made, and in contractual relations – throughout the term of the contract and thereafter for a period specified in provisions on archiving and limitations period for claims. Anyone has the right to file a complaint with the President of the Personal Data Protection Office. Questions concerning privacy at DZP can be sent to DZP’s Data Protection Inspector, Macieja Maciejewskiego, at: firstname.lastname@example.org.
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