Polish connections with Pandora Papers from Polish law point of view

What are Pandora Papers?

The Pandora Papers is a leak of more than 12 million documents that reveals hidden wealth, tax avoidance and sometimes unethical or corrupt dealings of the global wealthy – prominent world leaders, politicians, corporate executives, celebrities, and billionaires. The data was obtained by the International Consortium of Investigative Journalists (ICIJ) in Washington DC, which has been working with more than 140 media organizations on its biggest ever global investigation. The Pandora Papers was the largest investigation in journalism history that exposed a shadow financial system.

There are files that expose how some of the most powerful people in the world use secret offshore companies to hide their wealth. Already, politicians from 90 countries have been exposed as hiding money offshore and avoiding taxes. The papers reveal the offshore interests and activities. The offshore countries or territories are where it’s easy to set up companies, there are laws that make it difficult to identify owners of companies or there is low or no corporation tax.

Heroes of the publication include former British Prime Minister, Ukrainian President, Czech Prime Minister, Russian President, one of Colombian singers and one of German top models. One of Polish businessmen also appeared in the “Pandora Papers” investigation.

Is it illegal to use tax havens?

Loopholes in the law mean that using tax havens is not illegal. There are often good reasons to do it – such as protection from attacks or an unstable government – for storing money abroad. However, the practice is often seen as unethical, and using a network of hidden companies and businesses allows money from illegal sources to be hidden. The list of tax havens is provided in the Polish Regulation of the Minister of Finance on determining the countries and territories applying harmful tax competition in the scope of PIT and the Regulation of the Minister of Finance on determining the countries and territories applying harmful tax competition in the scope of CIT. The most well-known destinations include British Overseas Territories such as the Cayman Islands and the British Virgin Islands, as well as countries such as Switzerland, Singapore, Andorra, Monaco or Liechtenstein.

Tax avoidance and tax evasion according to Polish law

Under the amended anti-avoidance provisions, as of January 1, 2019, the general clause applies to an act done primarily for the purpose of obtaining a tax benefit or where one of the main purposes was to obtain such a benefit. This clause prohibits engaging in economic activity if it is aimed exclusively at reducing taxation, e.g. trading in intangible assets or transferring brands to tax havens will be treated by the tax authorities as illegal activity, not because it is against the law, but because its purpose is to engage in tax reduction. Tax evasion is contrary to tax laws and is treated as a crime. Using tax havens is misleading the tax authorities and intentionally acts to the detriment of the State Treasury. All this constitutes illegal elimination or reduction of tax burden. Tax evasion can be, for example, concealing the object of taxation or entering into an ostensible legal transaction.

What is different is tax avoidance. It is a legal action consisting of a series of actions that minimize the tax burden. It must be undertaken through lawful means.

Polish law provides for unlimited tax liability. This means that all income earned is subject to income tax in Poland regardless of its source. Pursuant to Article 3 Section 1 of the PIT Act (Personal Income Tax Act – a direct tax on income earned by individuals) unlimited tax obligation covers every natural person with place of residence on the territory of Poland. 

According to the Head of the Polish National Fiscal Administration, suspicious activities include for instance unjustified splitting of operations or engaging intermediary entities despite the lack of economic or business justification. The Polish authority examines in this respect the elements leading to a state identical or close to the state existing before the operation.

Example of using a tax haven

Imagine that Ms. Anna, who is domiciled in Poland, reports income in the Seychelles. She transfers the whole amount of her income to a bank account in a bank branch in Seychelles, because under the Seychelles law she does not pay income tax there and will not be prosecuted by the national administration. Thanks to this she does not pay tax in Poland. The problem arises if Ms. Anna would like to transfer the money then to Poland to, for example, invest in real estate. According to Polish regulations, if Anna receives income from activity performed outside the territory of the Republic of Poland or from sources of income located outside the territory of the Republic of Poland, and the double taxation convention does not provide for application of the method specified in paragraph 8, or with the country in which the income is received, the Republic of Poland has not concluded a double taxation convention – the income is combined with the income from sources of income located in the territory of the Republic of Poland. In other words, Anna’s income will be taxable in Poland.


The Pandora Papers was the biggest investigation in the history of journalism. It exposed the shadow financial system and showed us that people are trying to avoid taxes at every step. There are many ways to circumvent taxation, but not all of them are legal. The only legal way according to Polish law is tax avoidance. The evasion is an offence and shall be prosecuted.


Pandora Papers – ICIJ

Pandora Papers: A simple guide to the Pandora Papers leak – BBC News

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Pandora Papers. Na celowniku dziennikarzy rządzący Jordanią, Azerbejdżanem i Pakistanem –

Pandora Papers. Afera z ukrywaniem majątków przez polityków i biznesmenów. Wśród nich premier Czech – Polsat News

Raje podatkowe – co to takiego i jakie niosą ryzyko? (

Ekspert o rajach podatkowych. Czym są, jakie niosą ryzyko i czy są legalne? | Kurier PAP

Podatek dochodowy od osób fizycznych – Wikipedia, wolna encyklopedia

Klauzula przeciwko unikaniu opodatkowania (