Based on official information from the Polish Ministry of Finance (MoF), the Horizontal Monitoring Program is now entering the final stage of its pilot phase. Currently 19 large taxpayers (including multinationals and large Polish businesses) are finalizing the accession stage. The first cooperation agreements between taxpayers and the MoF are to be signed early September. However, as the MoF has stated – there is still room for new candidates to join the program.

The Horizontal Monitoring Program (HMP) is a new mechanism in Poland addressed to taxpayers whose revenues exceed EUR 50m. HMP is going to be based on mutual trust and in-depth cooperation between the taxpayers and tax authorities, and will result both in additional obligations and tangible benefits. One of the main assumptions of the program is to introduce balance and build trust between tax authorities and taxpayers through replacing the imperial attitude of tax authorities towards entrepreneurs with various forms of cooperation, including consensual dispute resolution methods.

HMP (cooperative compliance) is created based on similar projects functioning in other tax administrations (including Austria, the Netherlands and Great Britain). According to its assumptions, it is a new, voluntary form of supervision over the correctness of tax compliance of strategic taxpayers, implemented in real time and in cooperation with a taxpayer, based on mutual trust, transparency and understanding. The Polish version of HMP grants significant and tangible benefits for participants, including:

  • possibility of concluding a tax agreement with the Head of the National Tax Administration (guaranteeing legal certainty with regard to issues covered by the agreement, i.a. in all taxes and transfer pricing issues);
  • exclusion of the obligation to report tax schemes (MDR);
  • excluding the obligation to apply the restrictions resulting from art. 15e CIT (limiting the scope of tax deductible expenses);
  • extension or shortening of the deadlines for specific actions (including acceleration of granting tax refunds by the tax authorities);
  • reducing or excluding the obligation to pay late interest on tax arrears;
  • limiting the fee for concluding an agreement on setting transaction prices or issuing an advance tax decision;
  • obtaining information as to the procedures which should be implemented by the taxpayer in order to ensure proper implementation of obligations resulting from tax provisions;
  • no penal-fiscal liability in case of errors in tax accounting;
  • granting the taxpayer a privilege to be always treated as acting with due care as regards tax settlements.

Based on our experience, participation in HMP may fundamentally change the tax security and compliance perspective of businesses. However, in order to participate in the program taxpayers must also fulfil a number of obligations and introduce firm supervision procedures.