US-Poland Financial Information Exchange: A Step Closer to Transparency

In a significant move towards increased transparency, the United States and Poland have agreed to exchange financial information related to accounts held by their respective citizens and residents. The agreement, effective from 2014, aims to combat tax evasion and ensure that both countries comply with their obligations under international treaties.

What’s Being Exchanged?

Under the terms of the agreement, Polish Reporting Financial Institutions will provide information on US Reportable Accounts, while US Reporting Financial Institutions will furnish similar information on Polish Reportable Accounts. The data includes:

• Account Holder Details: names and taxpayer identification numbers (TINs)
• Account Balances or Values
• Interest, Dividends, and Other Income Generated by the Account
• Gross Proceeds from the Sale of Assets

The information will be exchanged annually, with the first batch of data expected to be transmitted within nine months after the end of each calendar year.

Key Provisions

1. Dual Tax Law Principles: The agreement allows for the use of principles from both countries’ tax laws to determine the amount and characterization of payments made on Reportable Accounts.
2. Currency Denomination: Information exchanged will identify the currency in which relevant amounts are denominated.
3. Scope of Information Exchanged: The scope of information exchanged varies depending on the reporting period, with more comprehensive data required starting from 2016.

Temporary Relief for Certain Accounts

To facilitate a smoother transition, the agreement provides temporary relief for Reportable Accounts maintained by Reporting Financial Institutions as of June 30, 2014. In these cases:

• Taxpayer Identifying Numbers May Not Be Available: Instead, the parties will exchange date-of-birth information if it is held in their records.

Implementation Timeline

The exchange of financial information under this agreement will take place annually, with the first batch of data expected to be transmitted within nine months after the end of each calendar year. This marks a significant step towards increased transparency and cooperation between the US and Poland in the area of taxation.

By [Date], both countries are expected to have fully implemented the agreement, ensuring that financial information is exchanged regularly and in accordance with international standards.