Poland: Poland executes FATCA provisions

Anna Misiak

During May 2015 the President of the Republic of Poland ratified the agreement' between Poland and the US to improve international tax compliance to implement FATCA and the associated intergovernmental agreement (IGA).

The agreement imposes an obligation on Polish financial institutions to obtain and exchange information with the tax authorities about US residents and citizens in Poland. The agreement will be performed on the basis of the Act of October 6 2015 which served to execute the provisions of the FATCA agreement.

The Act of October 6 determines a procedure of identification of US reportable accounts in Poland and the scope or manner of exchange required with the US. However, in most cases the Act refers to the FATCA agreement. An example of such reference is the procedure of identification of US reportable accounts based on identification of individual persons (account holders) according to the following criteria (US indicia):

• US citizenship or permanent residence (that is, a green card holder);
• US birth place;
• US residence address or correspondence address;
• US telephone number;
• standing instructions to transfer funds to an account maintained in the US;
• a power-of-attorney or signatory authority granted to a person with a US address; or
• an 'in care of' address or 'hold mail' address in the US.

Polish financial institutions are obliged to obtain self-certification from account holders on the above criteria. Account holders' self-certification is made in the context of criminal liability for making untrue statements.

If any of above criteria are met, the account holder will be treated as a US person and the Polish-reporting financial institution (RFI) should report his or her account to the Polish Ministry of Finance and then to IRS.

The reporting duty in respect to 2014 includes following information:

• the name, address, and US taxpayer identification number (TIN) of the US account holder;
• the account number;
• the name and identifying number of the Polish RFI; and
• the account balance or value as of the end of the relevant calendar year.

In respect to 2015 and subsequent years, Polish RFIs will report additional information regard:

• in the case of any custodial account, the total gross amount of interest, the total gross amount of dividends and the total gross amount of other income generated with respect to the assets held in the account;
• in the case of any depository account, the total gross amount of interest paid or credited to the account; and
• in the case of any account not described above, the total gross amount paid or credited to the account holder.

From 2016, the reporting duty will be extended to cover the total gross proceeds from sale or redemption of property paid or credited to the account.

The Act of October 6 2015 will also introduce penalties for improper and untimely reporting of US taxpayers.

The scope of the Act contains provisions related to the protection of data gathered in connection with performance of FATCA provisions which are included to secure financial institutions against charges of violation of banking and professional secrets. All personal data collected will be protected by fiscal secret.

It should also be stated that the Polish-US agreement is mutual, meaning the IRS will also report details on Polish account holders in the US to the Polish tax authorities.

The FATCA Act comes into force on December 1 2015.

Anna Misiak (anna.misiak@mddp.pl), Warsaw
MDDP
Tel: +48 (22) 322 68 88
Website: www.mddp.pl

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