On May 19, the Ministry of Finance published draft documents that present more details about the Cooperation Program. While the guidelines are generally aimed at prospective program participants, they may be of practical importance to the general public.
The act on resolution of disputes regarding double taxation and the conclusion of advanced pricing agreements that introduces the cooperation agreement is currently awaiting the President's signature.The purpose of the cooperation agreement is to ensure the taxpayer’s compliance with tax law and, at the same time, increase transparency and mutual trust between the tax authority and the taxpayer.
The entrepreneur being a party to the cooperation agreement will have the opportunity to discuss with the Head of NTA important issues related to the tax settlements. Such arrangements may concern among others:
The cooperation agreement may provide the taxpayer with benefits such as: reduction (by half) of the fees for an advance pricing agreement and for a security opinion, as well as reduction (or, in some cases, even the lack) of interest on tax arrears. The cooperation agreement may also protect an entrepreneur against additional tax liability and the tax audit. Moreover, the customs and fiscal control of a taxpayer who is a party to the cooperation agreement will be carried out only by the Head of the NTA.
An entrepreneur interested in concluding a cooperation agreement will have to meet some conditions (e.g. introduce a Tax Control Framework in the company).
By concluding the contract, the taxpayer will declare to voluntarily and properly fulfill duties and to report to the NTA all potentially controversial tax issues.
Conclusion of such an agreement will be preceded by a pre-audit carried out by the Head of the NTA.
A cooperation agreement may provide the taxpayer with some additional benefits.
Preparation to conclude a cooperation agreement may take some time (i.e. requires to prepare for the pre-audit, introduce or verify the internal Tax ControlFramework). Therefore, it is worth considering taking steps in this direction right now.