Fiscal penal sanctions
When the transfer pricing rules were changed in 2019, the rules on the fiscal penal sanctions arising from their application were changed as well. The provisions introduced in Article 80e § 1 and Article 56c § 1 of the Fiscal Penal Code refer directly to breaches of the obligations connected with filing the statement on the preparation of the local transfer pricing documentation and the transfer pricing information. With the change in the minimum wage from 1 July 2023 the level of the sanctions changed as well. The table below summarises those sanctions.
In addition to the penalties arising from the obligations to file the transfer pricing information and the statement on the preparation of the local transfer pricing documentation, the other sanctions described below also apply.
A fine of up to 120 daily rates (Article 80 § 1 of the Fiscal Penal Code)
Article 80 [Failure to provide tax information]
§ 1. Whoever, in breach of an obligation, fails to file the required tax information with the competent authority within the time limit is liable to a fine of up to 120 daily rates.
Article 80 § 1 of the Fiscal Penal Code provides that failure to produce, within 7 days of the request (a strict time limit), tax documentation which under Polish tax law is characterised as tax information carries a fine of up to 120 daily rates where an additional tax liability arises following the tax proceedings.
A daily rate may not be lower than one thirtieth of the lowest monthly wage at the time of the first instance ruling, nor exceed four hundred times that amount (Article 23 § 3 of the Fiscal Penal Code).
At the level of the minimum wage applicable in 2023, the possible penalty ranges from PLN 14,400.00 to PLN 5,760,000.00.
Scale of fines for fiscal offences in 2023
Fine for a fiscal offence
A fine of up to 240 daily rates
§ 2. A withholding agent, an entity referred to in Article 41 of the Personal Income Tax Act of 26 July 1991 which does not act as a withholding agent, a paying entity, an economic operator or an intermediate recipient which, in breach of an obligation, fails to file within the time limit with the taxpayer or the competent authority the required tax information or the information referred to in Article 42(2)(2) or Article 44d(1), (3), (5) or (7) of that act, is liable to a fine of up to 180 daily rates.
§ 2a. Whoever, in breach of an obligation, fails to file within the time limit with the competent authority the information on US reportable accounts referred to in Article 4(1)(2) of the Act of 9 October 2015 on the implementation of the Agreement between the Government of the Republic of Poland and the Government of the United States of America to improve international tax compliance and to implement FATCA (Journal of Laws, item 1712, and of 2016, items 1579 and 1948) is liable to a fine of up to 180 daily rates.
§ 3. If the information referred to in § 1 to 2a has been filed untruthfully, the perpetrator is liable to a fine of up to 240 daily rates.
§ 4. In a case of lesser gravity the perpetrator of the prohibited act described in § 1 to 3 is liable to a fine for a fiscal misdemeanour.
Filing untruthful tax information also carries a sanction of up to 240 daily rates under Article 80 § 3 of the Fiscal Penal Code.
In this case the possible penalty ranges from PLN 28,000.00 to PLN 11,520,000.00. In a case of lesser gravity the perpetrator of the prohibited act is liable to a fine for a fiscal misdemeanour.
A fine of up to 720 daily rates, imprisonment, or both penalties together
Article 54 [Evasion of a tax obligation]
§ 1. A taxpayer who, evading taxation, fails to disclose to the competent authority the subject matter or the basis of taxation or fails to file a return, thereby exposing the tax to depletion, is liable to a fine of up to 720 daily rates or to imprisonment, or to both of those penalties together.
§ 2. If the amount of tax exposed to depletion is of low value, the perpetrator of the prohibited act described in § 1 is liable to a fine of up to 720 daily rates.
Article 53 § 14.
Low value is a value which, at the time the prohibited act was committed, does not exceed two hundred times the minimum wage.
The legislator provides for sanctions not only for failing to prepare or produce the required tax documentation, but also for preparing it unreliably. A taxpayer who, evading taxation, fails to disclose to the competent authority the subject matter or the basis of taxation or fails to file a return, thereby exposing the tax to depletion, is liable to a fine of up to 720 daily rates or to imprisonment, or to both of those penalties together.
If the court decides to apply the highest number of daily rates provided for, the penalty will range from PLN 86,400.00 to PLN 34,560,000.00. The act provides that where the amount of tax exposed to depletion is of low value, that is, does not exceed 200 times the minimum wage, the perpetrator of the act described in Article 54 § 1 is liable to a fine of up to 720 daily rates. This means that imprisonment is a risk for taxpayers in matters whose value in 2023 exceeds PLN 720,000.