Blazej Kuzniacki
Effectiveness of Polish general anti-avoidance measures in combatting the phenomenon of tax avoidance through use of controlled foreign companies
Summary
The paper deals with an issue of combating international tax avoidance through the use of controlled foreign companies (CFCs) from the perspective of Polish tax law. Generally speaking, this phenomenon contributes to erosion of a tax base and distorts the vertical equity of taxation (the taxpayer’s ability to pay). In consequence, any attempts taken by countries to combat the phenomenon are justified. There is, however, no specific anti-avoidance measures combating international tax avoidance through the use of CFCs (e.g. CFC rules) in force in Polish tax law. Thus, the question is whether anti-avoidance measures currently in force in Polish tax law may be considered effective with combating international tax avoidance through the use of CFCs.
Given the above, the main aim of the article is to answer to the question on effectiveness of Polish general anti-avoidance measures in combatting the phenomenon of tax avoidance through use of CFCs. It may be not only of theoretical but also of practical importance, since the group of Polish deputies has submitted a bill with proposal of CFC rules to the Polish parliament (Sejm) on 7th September 2012.