Overall findings
Poland’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Poland’s international legal framework to exchange the information with all of Poland’s Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has deficiencies affecting the proper functioning of elements of the AEOI Standard. Most significantly, Poland’s legislative framework does not define the scope of Reporting Financial Institutions in line with the requirements.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall determination on the legal framework: In Place But Needs Improvement
Conclusions on the legal framework
General context
Poland commenced exchanges under the AEOI Standard in 2017.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Poland:
enacted the Act of March 9, 2017 on exchange of tax information with other countries; and
made reference to the Act of November 16, 2000 on countering money laundering and terrorism financing for the purposes of the identification of Controlling Persons under the AEOI Standard.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2016. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 31 December 2017 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2018.
With respect to the exchange of information under the AEOI Standard, Poland:
is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2017;
has in place European Directive 2011/16/EU on Administrative Cooperation in the Field of Taxation as amended by Directive 2014/107/EU; and
has in place European Union agreements with five European third countries.1
Detailed findings
The detailed findings for Poland are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex B).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Determination: In Place But Needs Improvement
Poland’s domestic legislative framework is in place and contains most of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the scope of Reporting Financial Institutions required to report information (SR 1.1) the due diligence procedures to be applied (SR 1.2), and the framework to enforce the requirements (SR1.4). Most significantly, Poland’s legislative framework does not fully define Investment Entities in accordance with the requirements.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Poland has defined the scope of Reporting Financial Institutions in its domestic legislative framework in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, while Poland’s legislative framework has the required definition of Investment Entity, it does not include in binding law a requirement that the definition be interpreted consistently with the similar language defining “financial institution” in the Financial Action Task Force Recommendations. This is a key element to the definition of Reporting Financial Institution and is therefore material to the proper functioning of the AEOI Standard.
Recommendations:
Poland should amend its domestic legislative framework to require the term Investment Entity to be interpreted consistently with the language defining “financial institution” in the Financial Action Task Force Recommendation, although it is noted that the non-binding Explanatory Memorandum instructs that the interpretation of the Act be commensurate with the Commentary.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Poland has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary. While a deficiency has been identified concerning New Accounts opened during a transitory period, as alternative procedures were required and as the transitional period ended in on 30 April 2017, this is considered to be relatively minor and its impact not to be material.
Recommendations:
Poland should ensure that New Accounts opened during the transitory period of 1 January 2016 to 30 April 2017 are subjected to due diligence procedures that are in accordance with the AEOI Standard.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Poland has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
Recommendations:
No recommendations made.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Poland has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. While a deficiency has been identified with respect to a lack of an explicit legal basis to enforce a sanction where a Reporting Financial Institution is a legal arrangement, it is considered relatively minor and does not materially undermine the implementation of SR 1.4. This is because such Reporting Financial Institutions have so far not been known to exist in Poland and are considered unlikely to exist under Poland’s financial and legal frameworks.
Recommendations:
Poland should amend its domestic legislative framework to ensure that it is able to sanction noncompliance by a Reporting Financial Institution that is a legal arrangement.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Determination: In Place
Poland’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Poland’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Poland and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Poland has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
Recommendations:
No recommendations made.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Poland put in place its exchange agreements without undue delay.
Recommendations:
No recommendations made.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Poland’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Recommendations:
No recommendations made.
Comments by the assessed jurisdiction
No comments made.