For the identification of the beneficial owner, a declaration is sufficient
Establishing the existence of a real owner in a tax haven can be difficult in practice, especially when this premise is to be examined by the entity paying the receivable. In the amendment to the CIT Act, the Ministry of Finance proposes a solution that will simplify the entire process.
If the entity obliged to assess whether the arm’s length principle should be applied to a given transaction and prepare documentation, demonstrates with a statement issued by the entity receiving the receivable from a controlled transaction or a transaction other than a controlled transaction that the entity is the actual owner of the receivable, or that the actual owner of the receivable is not a havens entity, this is sufficient to verify the documentation obligation, according to the draft amendment to the CIT Act.
– This means that the issuance of a statement is sufficient to establish the real owner in a tax haven. This will undoubtedly simplify the current procedures and make settlements easier for related parties, assesses Cyprian Werykowski, tax adviser, partner at Thedy & Partners.