The draft of amendments to the CIT Act for 2021 imposes on taxpayers, inter alia, the requirement to establish and execute a tax strategy. Similar solutions have already been implemented by many other countries.

In Australia, qualified entities may use their websites to voluntarily disclose tax information according to specific guidelines, while in the UK, publication of the details of the executed tax strategy is mandatory for large taxpayers. The purpose of extending the Polish regulatory framework with analogous solutions is to improve the transparency of settlements involving the largest CIT payers. Nevertheless, introduction of the obligation to establish a tax strategy may provide a valuable opportunity to revise tax settlement procedures in force at the organization, thus mitigating the risk of errors and, consequently, a potential risk of penal fiscal liability. 

Key information on tax strategy

The obligation to establish a tax strategy and make it available to the public lies with tax capital groups and CIT payers whose revenue in the given tax year exceeded PLN 50 million. The report on the executed tax strategy should be made in Polish and published on the taxpayer's website.

The main components of the report are:

—   general information on the taxpayer-implemented management procedures and processes for tax obligation performance and tax compliance along with information on the forms of voluntary cooperation with the National Revenue Administration.

—   information on the tax duties fulfilled and the number of tax arrangements reported.

—   detailed data on related-party transactions with the value exceeding 5% of the balance sheet total within the meaning of the Accounting Act, determined as per an approved financial statement; information on the planned or undertaken restructuring activities which may impact the taxpayer’s or related entities’ tax liabilities; information on the submitted applications for tax rulings, Binding Rate Information, Binding Excise Information and information on tax settlements involving taxpayers seated in tax havens.

As noted in the explanatory memorandum to the Act introducing the new reporting obligation, the CIT Act provides for an open catalogue of items which should be taken into account when reporting the executed tax strategy. Moreover, the taxpayer may supplement the report with information they believe should be disclosed, especially given the type, kind and size of their operations.


The report on the tax strategy executed in the given tax year should be published by the end of the 12th month following the end of the tax year it covers. Given the interpretation of the Ministry of Finance and the lack of clear interim provisions, it must be assumed that the first report should be made already for 2020. Consequently, taxpayers whose tax year coincides with the calendar year are required to publish their report by 31 December 2021. This means that in the coming months adequate actions should be taken and the best possible options for tax strategy execution should be considered.

Practical aspects and areas of particular attention

Given the circumstances, each organization should ensure it has internal regulations governing tax settlement processes. In fact, it is a common practice for companies to establish procedures or instructions determining the way tax duties are performed and designating persons responsible for carrying out given tax-related activities. Thus, the initial steps in preparing and publishing the report on the executed tax strategy is to assess the validity and applicability of the procedures in place to identify possible gaps and to update them for compliance with the regulatory framework. A particular focus should be placed on those aspects of processes and methods applied which may expose the company to tax risks and on those processes and processes which may display insufficient level of control. The review of the procedures in place may also help mitigate the risk of penal fiscal liability of the management board and employees involved with financial and tax matters, with special regard to the mechanisms of exclusion of guilt in selection and guilt in supervision.

The review process provides a valuable opportunity to identify potential errors and loopholes in the tax settlement processes conducted by the company. Particular focus should be put on:

—   updating the procedures and checking them against the actual state of affairs. In fact, lack of practical application of procedures makes it impossible to mitigate the risks related to penal fiscal liability,

—   analysing whether the processes in place are in compliance with the Four Eyes Principle stating that each action taken by employees which may generate material risk for the company needs additional approval.

—   shared responsibility, meaning, inter alia, that key decisions for the company are taken collectively.

Ensuring that the aforementioned steps are taken will make it possible to implement adequate changes increasing employees’ security and effectiveness of the tax obligation performance processes. 

Trade secret

It should be noted that the report on the executed tax strategy should exclude information being trade, industry, professional or manufacturing process secret. Due to the fact that the level of detail of the information provided and disclosed has not been identified by the legislator, an important aspect of working on the strategy will be to develop an approach on identifying confidential data. In practice, this issue may give rise to many doubts. Unquestionably, the knowledge of case-law and decisional practice as to the scope of confidential information may prove very useful.

In practice, invoking the trade secret principle may lead to a situation where the report consists of two parts: the publicly available part including information on the general tax strategy, published on the taxpayer’s website, and the unpublished part covering detailed analyses of the processes and procedures ensuring tax compliance. This aspect seems of particular importance in the context of safeguarding against competition.

To summarize, works on the tax strategy should not be delayed any further. The remaining time should be effectively spent on performing a comprehensive review of the tax procedures in place as well as deciding which data may be disclosed and which of them constitute trade secret.


Joanna Krzemińska, Partner, Tax FS Department, KPMG in Poland

Anna Sęk, Manager, Tax FS Department, KPMG in Poland