Information on the implemented tax strategy of the PZU Tax Group for 2022

TCG PZU was established on the basis of the Tax Agreement of the PZU Group concluded on 6 November 2020 for the tax years 2021, 2022 and 2023, registered by the Head of the First Masovian Tax Office on 11 December 2020.

Between the years 2021 and 2023, TCG PZU comprises:

1) PZU SA as the parent company and representing TCG PZU,
2) subsidiary companies:

1) PZU SA as the parent company and representing TCG PZU, 
2) subsidiary companies:

a. Powszechny Zakład Ubezpieczeń na Życie Spółka Akcyjna (hereinafter referred to as PZU Życie),
b. PZU Centrum Operacji Spółka Akcyjna (hereinafter referred to as PZU Centrum Operacji),
c. PZU Pomoc Spółka Akcyjna (hereinafter referred to as PZU Pomoc),
d. PZU Zdrowie Spółka Akcyjna (hereinafter referred to as PZU Zdrowie),
e. PZU LAB Spółka Akcyjna (hereinafter referred to as PZU LAB),
f. PZU Cash Spółka Akcyjna (hereinafter referred to as PZU Cash),
g. PZU Finanse Spółka z ograniczoną odpowiedzialnością (hereinafter referred to as PZU Finanse),
h. LINK4 Towarzystwo Ubezpieczeń Spółka Akcyjna (hereinafter referred to as LINK4),
i. Ogrodowa-Inwestycje Spółka z ograniczoną odpowiedzialnością (hereinafter referred to as Ogrodowa-Inwestycje),
j. Ipsilon Spółka z ograniczoną odpowiedzialnością (hereinafter referred to as Ipsilon),
k. Omicron BIS Spółka Akcyjna (hereinafter referred to as Omicron BIS),
l. Tulare Investments Spółka z ograniczoną odpowiedzialnością (hereinafter referred to as Tulare Investments),
m. PZU Projekt 01 Spółka Akcyjna (hereinafter referred to as PZU Projekt)

– hereinafter referred to jointly as the Companies.

The activities of the Companies belonging to TCG PZU are generally conducted in the field area of insurance services, as well as in the field areas of, inter alia, financial services, loss adjustment or medical services. The activities of the Companies are governed by a number of specific regulations, including, inter alia, those relating to insurance activities and regulations relating to listed companies. The activities of the Companies, which are covered by financial market supervision regulations, are also subject to supervision by the Polish Financial Supervision Authority.

In 2022, TCG PZU and the TCG PZU Companies exercised due diligence to fulfil the obligations incumbent upon them, in particular, took care to settle tax liabilities reliably, correctly and on time and took the necessary measures to avoid situations that could lead to an infringement of the tax law. The business decisions of TCG PZU and the Companies were made on the basis of assessing the impact of tax risks.

In 2021, the resolutions of the Management Board of PZU SA adopted:

• Strategy of the PZU Group for 2021 - 2024 - #PZU Potential and Growth - We take care of what matters most in life (hereinafter referred to as the Strategy of the PZU Group),
• Tax Strategy of the PZU Tax Capital Group for 2021 – 2023 (hereinafter referred to as the Tax Strategy of TCG PZU).

The Tax Strategy of TCG PZU was developed taking into account the standards and rules for managing tax issues, in particular tax risk management, developed over many years of operation of the Companies that constitute TCG PZU.

The Tax Strategy of TCG PZU is consistent with the Strategy of the PZU Group, including its adhered ethical values and the business objectives derived from those values. First and foremost, the Tax Strategy of TCG PZU refers to the rules of integrity adopted in the Strategy of the PZU Group, which is expressed, inter alia, by honouring commitments and applying transparent business practices.

The Tax Strategy of TCG PZU is also consistent with other procedures in place at TCG PZU, including in particular the Good Practices of the PZU Group and the Compliance Policy, under which TCG PZU pays particular attention to conducting its economic activities in compliance with the provisions of the law and ethical standards, and to implementing transparent and unambiguous rules of conduct in TCG PZU, leading to the informed management of the activities undertaken at TCG PZU.

Among the guiding rules by which TCG PZU fulfils its tax obligations and manages tax risks are timeliness, transparency and openness to cooperation with the tax authorities. The guiding principle of TCG PZU is the non-acceptance of conscious tax risk taking, both in the context of tax and business activities. These activities are undertaken using the tools available, i.e.:

a. transparent division of the roles and responsibilities of the different units within the structure of TCG PZU and of the Companies forming TCG PZU,

b. internal procedures that regulate the conduct and execution of tax obligations,

c. IT tools that support the performance of tax settlements,

d. possibilities of a cooperation with external experts,

e. possibilities of a cooperation with tax authorities. 

One of the most important field areas of the implemented tax strategy is also the planning of transactions and events, their tax analysis and the identification of areas of particular sensitivity that may give rise to risks under the tax law.

Under the Art. 27c § 2 section 1(a) of the CIT Act, in fulfilment of the obligation to draw up and make public information on the tax strategy pursued, TCG PZU is obliged to provide information on the processes and procedures relating to the management of the fulfilment of its obligations under the tax law and ensuring their proper implementation.

For the purpose of ensuring effective tax risk management, the Companies that make up PZU TCG on 10 May 2021 entered into an Agreement on the Principles of Operation of the PZU Tax Group and implemented a number of internal procedures and processes to improve the identification, assessment and monitoring of tax risks, in terms of:

• accounting areas, in which the procedures implemented ensure the reliability of the accounts and aim to standardise the process of document circulation, the invoicing process and the identification of the entities responsible for the reliability of the invoices issued;
• tax settlements, ensuring the correct calculation and settlement of individual taxes (such as value added tax, corporate income tax and real property tax, among others) and the security and timeliness of payments and financial settlements, also with regard to the cooperation of the individual Companies that make up TCG PZU;
• fulfilling other tax obligations, including countering a failure to provide information on tax schemes and monitoring transactions and settlements with related parties;
• rules of interaction between the entities belonging to TCG PZU in the performance of their tax obligations, ensuring that the activities undertaken by TCG PZU comply with the applicable provisions of law;
• other areas relevant to the tax law.

Furthermore, in order to ensure the proper performance of obligations under the tax law, the Companies that make up TCG PZU monitored changes in the legal environment, interpretation of the law and lines of interpretation developed in the judicial decision and by the tax authorities, and, if necessary, updated the processes and procedures implemented internally on an ongoing basis in order to adapt the actions and decisions taken to the applicable legislation and the needs of TCG PZU and the Companies that make up TCG PZU.

Pursuant to the Art. 27c § 2 section 2 of the CIT Act, as a part of its obligation to draw up and make public information on the tax strategy pursued, TCG PZU is obliged to provide information on the fulfilment of tax obligations by the taxpayer in the territory of the Republic of Poland.

Pursuant to the Art. 4 of the Tax Ordinance Act of 29 August 1997 (hereinafter referred to as the Tax Ordinance), a tax obligation is an unspecified obligation of compulsory pecuniary benefit arising from the tax acts in connection with the occurrence of an event specified in those acts.

TCG PZU and its constituent Companies made a number of tax settlements arising from their activities, based on applicable tax legislation. 

In the 2022 tax year, TCG PZU fulfilled its tax obligation under the Art. 1a of the CIT Act - as a corporate income tax payer.

The companies that make up TCG PZU identified and performed, according to the provisions of the law and within the required timeframe, on the basis of the acts, applicable procedures and with the help of qualified personnel, the following obligations, inter alia:

1. tax obligation under the Art. 19a of the Act on Goods and Services Tax - as a taxpayer of tax on goods and services;
2. tax obligation under the Art. 3-5 of the Act of 9 September 2000 on Tax on Civil Law Transactions - as a taxpayer of tax on civil law transactions;
3. tax obligation under the Art. 4 of the Act of 15 January 2016 on Tax on Certain Financial Institutions - as a taxpayer of tax on certain financial institutions (refers to PZU SA, PZU Życie, LINK4);
4. tax obligation under the Art. 3 of the Act of 12 January 1991 on Local Taxes and Fees - as a real property tax payer;
5. tax obligation under the Art. 31 of the Personal Income Tax Act of 26 July 1991 (hereinafter referred to as the PIT Act) - as a payer of personal income tax;
6. ax obligation under the Art. 21 of the CIT Act - as a payer of withholding tax on dues paid to non-residents;
7. tax obligation under the Art. 29 of the PIT Act - as a payer of withholding tax on dues paid to non-residents.

According to the Art. 27c § 2 section 2 of the CIT Act, as a part of its obligation to prepare and make public information on the tax strategy pursued, TCG PZU and the Companies that make up TCG PZU are obliged to present information on the number of information on tax schemes provided to the Head of the National Revenue Administration.

TCG PZU, according to the Art. 1a section 3a of the CIT Act, represents the tax capital group with respect to its obligations under the CIT Act. However, it is not an entity obliged under the 11th Chapter of the Tax Ordinance to report tax schemes on behalf of TCG PZU. This obligation is identified and performed independently by the individual Companies belonging to TCG PZU.

To this end, companies meeting the conditions referred to in the Art. 86l of the Tax Ordinance have implemented an internal procedure for counteracting non-compliance with the obligation to provide information on tax schemes. In order to properly comply with the obligation to report tax schemes, the procedure in question also introduced rules for the dissemination of knowledge among employees about the obligations related to the occurrence of tax schemes. 

According to the Art. 31y of the Act of 2 March 2020 of the Act on Special Solutions Related to the Prevention, Counteracting and Combating of COVID-19, Other Infectious Diseases and Crisis Situations Caused by Them, in the case of a tax scheme within the meaning of the Art. 86a § 1 clause 10 of the Tax Ordinance, the reporting time limits referred to in the 3 Section, Chapter 11a of the said Act shall not commence and those commenced shall be suspended during the period from 31 March 2020 until the 30th day following the day on which the state of epidemic emergency and state of epidemic declared in connection with COVID-19 is revoked. 

Bearing in mind that in 2022 the state of emergency has not been revoked, a failure of a Company to file in 2022 information on tax schemes may be due to a failure to identify a scheme or to benefit from the suspension of the reporting time limit outlined above.

Below is information on the type and amount of information on tax schemes reported to the Head of the National Revenue Administration by the individual Companies that make up TCG PZU.

COMPANY	TYPE OF INFORMATION	QUANTITY OF INFORMATION
LINK4	Information on the corporate income tax scheme	2
PZU SA	In the tax year 2022, PZU SA did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU Życie	In the tax year 2022, PZU Życie did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU Zdrowie	In the tax year 2022, PZU Zdrowie did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU Centrum Operacji	In the tax year 2022, PZU Centrum Operacji did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU Pomoc	In the tax year 2022, PZU Pomoc did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU Cash	In the tax year 2022, PZU Cash did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU Finanse	In the tax year 2022, PZU Finanse did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
Ogrodowa-Inwestycje	In the tax year 2022, Ogrodowa - Inwestycje did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
Ipsilon	In the tax year 2022, Ipsilon did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
PZU LAB	In the tax year 2022, PZU LAB did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
Omicron BIS	In the tax year 2022, Omicron BIS did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
Tulare Investments	In the tax year 2022, Tulare Investments did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.
Tulare Investments	In the tax year 2022, PZU Projekt 01 did not submit any Information on the Tax Scheme to the Head of the National Revenue Administration.

 

In accordance with the obligation under the Art. 27c section 2 clause 3a of the CIT Act, this information includes data on transactions with affiliated entities within the meaning of the Art. 11a section 1 clause 4 of the CIT Act, the value of which exceeds 5% of the balance sheet total of assets within the meaning of the accounting regulations, determined on the basis of the last approved financial statements, including entities which are not tax residents of the Republic of Poland.

TCG PZU was not a party to any transactions with affiliated entities. The parties to the transactions were companies owned by TCG PZU.

According to the obligations arising from the provisions contained in the Chapter 1a of the CIT Act, the Companies belonging to TCG PZU analysed the relationships and transactions carried out with affiliated entities from the point of view of their compliance with the tax law regulations. In the case of concluding transactions with entities that have no registered office in the territory of Poland, the Companies belonging to TCG PZU verified the compliance of these transactions in terms of their specific scope of documenting.

The list of transactions carried out is presented below, together with an indication of the subject of the transaction and the name of the affiliated entity with which the transaction was carried out.

COMPANY	NUMBER OF TRANSACTIONS	SUBJECT  OF TRANSACTION	AFFILIATED  ENTITY
PZU SA	2	financial services	Bank Polska Kasa Opieki SA
PZU Życie	2	financial services	Bank Polska Kasa Opieki SA
PZU Centrum Operacji	6	insurance brokerage services, IT services, contact centre, bulk printing services, personnel and payroll services, bulk printing services, administrative and office services and cost re-invoicing	PZU SA, PZU Życie, PZU Zdrowie, PZU Pomoc, TUW PZUW, PEKAO Financial Service Sp. z o.o.
PZU Pomoc	4	loss adjustment services, administrative and office services	PZU SA, PZU Życie, LINK4, PZU Centrum Operacji,
Ogrodowa-Inwestycje	1	services of purchase and repurchase of investment sub-fund units,	TFI PZU SA,
Ipsilon	2	bookkeeping services, rental services for virtual office,	PZU Finanse,
PZU Zdrowie	1	purchase of medical services,	PZU Życie
PZU Finanse	14	bookkeeping services, rental services for office space, IT services, bookkeeping services for funds,	PZU SA, PZU Zdrowie, PZU Centrum Operacji, PZU Pomoc, PZU Cash, Ogrodowa – Inwestycje, TFI PZU SA, PZU Fundusz Inwestycyjny Otwarty Parasolowy, INPZU Specjalistyczny Fundusz Inwestycyjny Otwarty,  PŚZiPZ Elvita-Jaworzno III Sp. z o.o.,
PZU LAB	1	administration services,	PZU SA,
Omicron Bis	2	bookkeeping services, services of maintaining the Shareholders' Register,	PZU Finanse,  Bank PEKAO.
LINK4	2	reinsurance services, loan,	PZU SA
Tulare Investments	2	bookkeeping services, rental services for virtual office,	PZU Finanse
PZU Cash	2	agency services, BL services,	Alior Bank SA , AL Finanse Sp. z o.o.,
PZU Projekt 01	1	bookkeeping services.	PZU Finanse.

 

According to the Art. 27c § 2 section 1 b of the CIT Act, as a part of its obligation to draw up and make public information on its tax strategy, TCG PZU and the Companies that make up TCG PZU are obliged to present information on voluntary forms of cooperation with the authorities of the National Revenue Administration.

For the purposes of this information, a voluntary form of cooperation with the authorities of the National Revenue Administration should be deemed to be an agreement on the cooperation with regard to taxes falling within the jurisdiction of the National Revenue Administration, concluded between the taxpayer and the Head of the National Revenue Administration, pursuant to the Art. 20s-20za of the Tax Ordinance.  

TCG PZU and the Companies that make up TCG PZU did not conclude a cooperation agreement with the Head of the National Revenue Administration, as referred to in the Art. 20s – 20za of the Tax Ordinance.

According to the Art. 27c § 2 section 4 of the CIT Act, in fulfilment of its obligation to draw up and make public information on its tax strategy, TCG PZU and the Companies that make up TCG PZU are obliged to provide information on the applications submitted to the tax authorities.

The details of the submissions made to the tax authorities by TCG PZU and the Companies that make up TCG PZU are presented below.

for the issuance an interpretation of the tax law regulations referred to in Article 14b of the Tax Ordinance

COMPANY	TYPE OF APPLICATION	QUANTITY OF APPLICATION	TAX CONCERNED
PGK PZU	for the issuance an interpretation of the tax law regulations referred to in Article 14b of the Tax Ordinance	1	corporate income tax
PZU SA	for the issuance an interpretation of the tax law regulations referred to in Article 14b of the Tax Ordinance	1 1	personal income tax   personal income tax
PZU Życie	for the issuance an interpretation of the tax law regulations referred to in Article 14b of the Tax Ordinance	1 1	personal income tax   personal income tax
LINK 4	for the issuance an interpretation of the tax law regulations referred to in Article 14b of the Tax Ordinance	1	corporate income tax
PZU Cash	for the issuance an interpretation of the tax law regulations referred to in Article 14b of the Tax Ordinance.	1	goods and services tax
PZU Zdrowie	PZU Zdrowie did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
PZU Centrum Operacji	PZU Centrum Operacji did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
PZU Pomoc	PZU Pomoc did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
Ogrodowa-Inwestycje	Ogrodowa - Inwestycje did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
Ipsilon	Ipsilon did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
PZU Finanse	PZU Finanse did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
PZU LAB	PZU LAB did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
Omicron Bis	Omicron BIS did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
Tulare Investments	Tulare Investments did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.
PZU Projekt 01	PZU Projekt 01 did not make any requests to the tax authorities concerning the interpretation of the provisions of the tax law in the tax year 2022.

 

According to the Art. 27c § 2 section 5 of the CIT Act, as a part of fulfilling the obligation to draw up and make public the information on the tax strategy pursued, TCG PZU and the Companies that make up TCG PZU are obliged to provide information on the tax settlements made in the territories or countries applying harmful tax competition, indicated in the implementing acts issued pursuant to the Art. 11j section 2 of the CIT Act and pursuant to the Art. 23v section 2 of the PIT Act and in the announcement of the Minister competent for public finance issued on the basis of the Art. 86a § 10 of the Tax Ordinance.

TCG PZU and the Companies that make up TCG PZU did not settle taxes in the territories or countries with harmful tax competition as indicated in the: 

Regulation of the Minister of Finance of 28 March 2019 on the identification of countries and territories applying harmful tax competition with respect to corporate income tax,

Announcement by the Minister of Finance, Funds and Regional Policy of 26 February 2021 on the announcement of the list of the countries and territories indicated in the EU list of non-cooperative jurisdictions for tax purposes adopted by the Council of the European Union which are not included in the list of countries and territories practising harmful tax competition issued under the personal income tax law and the corporate income tax law, and the date of adoption of this list by the Council of the European Union.

TCG PZU and the Companies that make up TCG PZU also did not enter into transactions aimed at avoiding taxation, including in particular the acquisition of bonds issued by the Treasury of the Republic of Panama and the Treasury of the Republic of Trinidad and Tobago cannot be considered as such.

According to the Art. 27c § 2 section 3 b of the CIT Act, as a part of fulfilling the obligation to draw up and make public information on the tax strategy pursued, TCG PZU and the Companies that make up TCG PZU are obliged to provide information on restructuring activities planned or undertaken by the taxpayer which may affect the amount of tax liabilities of the taxpayer or its related entities within the meaning of the Art. 11a section 1 clause 4 of the CIT Act.

In the provisions concerning the obligation to draw up and make public information on the implemented tax strategy, no legal definition of the term 'restructuring measures' has been introduced. Taking into account that this information is a document concerning tax aspects, the definition of the indicated term should be sought in tax acts. 

According to the § 2 clause 1 the Regulation of the Minister of Finance of 21 December 2018 on transfer pricing with regard to corporate income tax, restructuring for the purposes of the indicated regulation is understood to be the reorganisation:

a) which involves a significant change in commercial or financial relations, including the termination of existing contracts or a change in their material terms, and
b) that entails a transfer between affiliated entities of functions, assets or categories of risk, if, as a result of that transfer, the taxpayer's projected average annual earnings before interest and taxes (EBIT) over a three-year period following the transfer would have changed by at least 20% of the projected average annual EBIT over the same period had the transfer not taken place.

With the above in mind, as a part of the restructuring of the PZU Capital Group, the Companies of TCG PZU made the following transactions in 2022:

1. acquisition by PZU SA of 100% of shares in Towarzystwo Funduszy Inwestycyjnych Energia Spółka Akcyjna ('TFI Energia') from Polska Grupa Energetyczna Spółka Akcyjna;
2. acquisition of 100% of shares in the share capital of Centrum Medyczne Nowa5 sp. z o.o. by PZU Zdrowie;
3. sale by PZU Pomoc SA of all shares held by PZU Pomoc in GSU Pomoc Górniczy Klub Ubezpieczonych SA.

The companies of TCG PZU did not plan or undertake any other restructuring measures that could affect the tax liabilities of the Company or affiliated entities within the meaning of the Article 11a section 1 clause 4 of the CIT Act in the tax year 2022.