Abstract

The article criticizes the view that under the Polish GAAR the non genuines of the arrangement implicates that the tax advantage defeats the object or purpose of the applicable tax law. Such a standpoint was mentioned in a few rulings, amongst others of Polish administrative court and Council for Tax Avoidance Matters. The authors argue that under polish regulations the most important factor determining GAAR applicability is identification of misuse or abuse of the law. They claim that this results in particular from the literal wording of the law under which non-genuineness of the arrangement is a situation in which a reasonable taxpayer would not take given action, if tax benefit contrary to the object or purposes of the tax law or provision of the tax law would not be present. Moreover authors make notice that certain tax regulations are aimed at encouraging tax payers to take certain actions. In such cases, even if a taxpayer takes steps that would not be reasonable if tax benefit is not present (e.g. non-genuine in view of the polish GAAR), GAAR should not be applied as long as aim of the regulation is met.