Elimination of reporting of purely domestic arrangements

The reporting obligation will apply exclusively to cross-border arrangements, i.e. arrangements involving more than one tax jurisdiction. So-called “domestic” arrangements – those concerning only Poland and producing no effects in other jurisdictions – will no longer be subject to reporting.

In this respect, Polish regulations will be aligned with the standard set out in the DAC6 Directive and will focus solely on cross-border arrangements.

Changes to key definitions

The amendment comprehensively reshapes the MDR conceptual framework, aligning it with the structure of the DAC6 Directive. The definitions of an tax arrangement, promoter, user, hallmarks and the main benefit test have been revised and clarified. The new definitions are more consistent and better aligned with EU regulations.

Removal of additional specific hallmarks

Following the amendment, the catalogue of hallmarks will be limited to those directly derived from EU standards (DAC6). Additional hallmarks previously included in Polish regulations, which were not based on the Directive, have been removed.

As a result, reporting obligations will be significantly reduced. Taxpayers who previously reported arrangements involving, for example, dividend payments or payments of interest or royalties to foreign entities will, as a rule, no longer be required to report them solely on that basis.

An MDR reporting obligation will arise only where a given arrangement meets the criteria set out in the DAC6-compliant hallmarks (general hallmarks subject to the main benefit test or specific hallmarks).

In practice, this means a significant narrowing of the reporting scope and the elimination of MDR reporting obligations for many arrangements of a purely business nature.

Merging the roles of promoter and supporter

The amendment simplifies the structure of MDR participants by removing the separate category of a “supporter”.

Entities performing supporting activities (a new concept introduced by the amendment) may be classified as promoters if their involvement is relevant to the design or implementation of the arrangement.

Changes to the performance of reporting obligations

The amendment introduces detailed rules governing cooperation between promoters and users in fulfilling reporting obligations.

In addition, documentation and information obligations are strengthened, particularly with regard to providing the Tax Scheme Number (NSP) or information on its absence.

The legislator has also clarified situations where reporting obligations may apply to multiple entities simultaneously, removing the requirement to identify other participants as a condition for exemption from reporting.

Professional secrecy

The amendment takes into account the case law of the Court of Justice of the European Union and explicitly strengthens the protection of legal professional privilege.

As a result, advocates, attorneys-at-law, tax advisers and patent attorneys will not be required to report arrangements if doing so would breach their professional secrecy obligations. Their role will be limited to informing the client about the obligation to report.

Changes to MDR-3 (signing and deadlines)

Information on the application of a reportable arrangement (MDR-3) will be submitted annually, using a separate form for each reported arrangement.

Additionally, MDR-3 may be signed by an authorised representative, which will significantly simplify the reporting process in large organisations.

Abolition of the obligation to maintain internal MDR procedures

Entities will no longer be required to formally implement and maintain internal MDR procedures.

However, despite the removal of this formal obligation, the need to correctly identify and report arrangements remains fully relevant.

Exclusion of MDR from individual tax rulings

Following the amendment, MDR provisions will be formally excluded from the scope of individual tax rulings.

As a result, taxpayers will not be able to obtain official confirmation of their reporting obligations in this form. In practice, this means they will need to independently assess whether an arrangement constitutes a reportable arrangement and what reporting obligations arise.

Changes regarding the Tax Scheme Number (NSP)

The amendment clarifies the rules for assigning the Tax Scheme Number (NSP) by the Head of the National Revenue Administration.

The NSP will be issued within 14 days of receiving a correct submission, and its issuance will constitute confirmation that the arrangement qualifies as a reportable arrangement.

Given the exclusion of individual tax rulings in the MDR area, the importance of the NSP will increase significantly. In practice, it may become the only formal reference point for determining whether an arrangement is reportable.

The possibility of refusing to assign or annulling an NSP in specific cases has also been introduced.

No changes to penalties for MDR breaches

The amendment does not materially change the system of penalties for non-compliance with MDR obligations. Significant fines will continue to apply, confirming the legislator’s strict approach to enforcement.

It is worth noting, however, that the amended provisions explicitly extend liability to late submission of MDR-3. Previously, sanctions applied only to a complete failure to report, i.e. they did not cover delays.

Other changes

The amendment also introduces a number of supplementary and organisational changes.

In particular:

• the obligation to submit MDR-2 has been abolished,
• VAT and excise duty have been excluded from the scope of MDR provisions.

These changes are systemic in nature – they streamline the regulations and eliminate elements going beyond DAC6 standards.

How to prepare for the changes

The planned amendment undoubtedly simplifies reporting obligations and aligns them with the DAC6 Directive. However, it should not be viewed merely as deregulation leading to a significant reduction of obligations.

Once the new rules enter into force, existing procedures and internal practices may require substantial revision. In many cases, they may prove overly complex in relation to the new, narrower MDR scope.

At the same time, the correct identification of reportable arrangements will remain essential – albeit limited to cross-border arrangements.

The lack of access to individual tax rulings and the absence of “white lists” further increase the importance of independent analysis in this area.

From an organisational perspective, we recommend taking at least the following steps:

• review and update MDR procedures – despite the removal of the formal obligation, maintaining appropriate internal regulations remains advisable, as they help define responsibilities and mitigate risk in light of continued high penalties,
• update the knowledge of tax teams and MDR-responsible personnel – particularly with regard to new definitions, hallmarks and reporting rules,
• review historical obligations – the new rules apply going forward, meaning existing MDR obligations remain valid.

If you would like to assess the impact of the amendment on MDR obligations in your organisation or adapt your current framework to the new regulations, please do not hesitate to contact our team of experts.