WIDAR COMMODITIES Sp. z o.o.
English
Polski

Information about the tax strategy implemented by
Widar Commodities Sp. z o.o.
in respect of tax year
from 1 July 2020 to 30 June 2021

I. Introduction

This document presents information about the tax strategy implemented by Widar Commodities Sp. z o. o (hereinafter: the “Company” or “Widar”) which the Company is obliged to prepare and publish pursuant to Article 27c of the CIT Act1 due to having met the conditions referred to in Article 27b.2.2 of the CIT Act.
The information has been prepared and published in accordance with the said regulation and taking into account the Guidelines regarding the Internal Tax Supervision Framework (version 2.0 June 2020) issued by the National Revenue Administration [Polish: Krajowa Administracja Skarbowa, KAS], with special reference to section 6.1. of the said document which relates to a tax strategy.
The information about the implemented tax strategy, in particular, contains information about: processes and procedures for the Company’s performance of obligations under tax regulations, voluntary forms of cooperation between the Company and the KAS, the performance of tax obligations in the Republic of Poland (including tax schemes reporting (MDR)), related-party transactions, restructuring activities undertaken and planned, applications for tax rulings and binding rate information, and regarding tax settlements in territories and countries applying harmful tax competition.
This Information does not refer to information with access reserved due to applicable provisions of law in this respect, including but not limited to information that is subject to protection of classified information, information which the Company cannot disclose due to obligations imposed by provisions of law, contractual obligations or obligations arising from the Company’s business decisions. Additionally, this Information does not comprise confidential information which, due to business plans and projects pursued by the Company, is subject to protection as trade, industrial, professional or manufacturing process secrets.
The information relates to the Company’s tax year from 1 July 2020 to 30 June 2021 (hereinafter: the “Tax Year “) and has been prepared on the basis of the tax strategy implemented by the Company.

II. General Information

1. Information about the Company
Widar (former name: Sodrugestvo Polska Sp. zo.o.), entered into the National Court Register under number KRS 0000422220, conducts its business at ul. Okopowa 7, 80-819 Gdańsk, using the following identification numbers: NIP 5252532489 and REGON 146154900. The share capital of the company amounts to PLN 505,000.
In the reported period, i.e. 01.06.2020 – 30.06.2021 the Company was a subsidiary of Sodrugestvo Regions S.A.R.L. based in Luxembourg, which – as the parent company – held 100% shares in the share capital and 100% share in the voting rights of the Company.
The core registered object of business of the Company is wholesale of grain, unmanufactured tobacco, seeds and animal feeds (PKD 46.2. Z).
In the reported period, i.e. 01.06.2020 – 30.06.2021 the Company was a member of the Sodrugestvo Group (hereinafter: the “Group”).

The principal activities of the Group are:

  • international sale and distribution of oilseeds, grains, vegetable and animal oils, and other agriculture soft commodities for the feed industry, as well as establishing infrastructure for such sale and distribution;
  • purchasing, processing and storing grains and oilseeds in former Soviet Union countries, Latin America and other regions;
  • operating a seaport terminal infrastructure consisting of railways, oilseed and grain storage, and oil storage facilities in Kaliningrad Region, Russia;
  • transportation services performed using railcars, barges, seafaring or river vessels owned and leased in in former Soviet Union countries, Latin America and other regions.

The Group focuses on soybean and rapeseed processing, manufacturing of fishmeal and composite animal protein mix, imports of corn gluten and lysine, as well as distribution of products to end consumers.
The Group selects the best source materials, processes them using the latest hi-tech equipment, and supplies high-quality animal and vegetable proteins to Russia, Belarus, Central Asian countries, the Baltic and European countries.
The Company engages in trade and distribution, buying and selling in Poland the goods offered by the Group. The main goods traded by Widar include mostly soybean meal sold as raw materials for animal feed industry.

2. Objectives of the tax strategy of the Company
The objective of the tax strategy is to set out the overall approach to managing and supervising tax issues within the Company, as well as the general framework for action in respect of tax issues and compliance with tax obligations. The purpose of the tax strategy of the Company is to achieve the proper fulfilment of obligations under tax regulations.
The Company implements the tax strategy which is aimed at achieving the proper fulfilment of obligations under tax regulations. Compliance with public law obligations and the requirement to pay amounts due in this respect to the State Treasury is the Company’s obligation resulting from its business conducted in Poland. As a reliable taxpayer, the Company properly performs its tax obligations exercising due care in this regard.
The Company’s tax strategy is reviewed by the Director(s) of the Company and the Group, in liaison with persons in charge of the Company’s tax settlements, on regular basis, no less than once a year.

III. Information about the processes and procedures applied by the taxpayer for managing the performance, and ensuring proper performance, of obligations arising from tax regulations, and voluntary forms of cooperation between the taxpayer and the bodies of the National Revenue Administration

1. General
1.1 Tax objectives

The timely and accurate performance of all obligations under tax regulations is one of the basic principles followed by the Company in its business.
Therefore, it is the Company’s objective to maintain accurately the books of accounts, records and accounts which reflect precisely all transactions and operations in which the Company’s assets are used. The said objective is defined in the Group’s “Code of Ethic, Conduct and Behaviour” as one of the basic principles of business of the Group companies. Furthermore, it is the Company’s objective to fulfil on a timely basis all obligations imposed on the Company by the provisions of tax law and thus to minimise the risk that the Company and persons acting for or on behalf of the Company are charged with breach of such regulations.

1.2 Tax risk management

It is the priority for Widar to minimise the tax risk understood as:

  • the risk of tax arrears arising in respect of any taxes of which the Company is a taxpayer or remitter (the risk of a failure to pay or to remit the tax, or delay in paying or remitting the tax);
  • the risk of non-performance or untimely performance of the Company’s obligations arising from the provisions of tax law – including but not limited to the risk of not filing or delay in filing tax returns, documentation, information, declarations, notifications, reports or disclosures, as referred to in the provisions of tax law;
  • the risk that fiscal-penal liability is imposed on the persons in charge of business affairs, including financial affairs, of the Company.

The Company does not aim at minimising the tax expense (tax optimisation). The Company does not rely on aggressive (not confirmed, not well-established) approaches to interpretation and application of tax regulations. In cases where different (conflicting) interpretations exist, as a rule the Company accepts the interpretation which involves the lowest risk that it will be challenged by tax authorities.
In order to minimise the tax risk, the Company uses tax advisory services provided by third parties as well as support from an entity engaged in professional bookkeeping. Additionally, the Company follows specific internal procedures and processes aimed at ensuring proper fulfilment of tax obligations.

1.3 Division of competences regarding obligations under tax regulations

The Company’s management board implements internal controls with a view to ensuring effective monitoring of the fulfilment of the Company’s obligations imposed by the provisions of tax law, including but not limited through:

  • supervising and verifying the correctness of the Company’s tax settlements;
  • exercising due care in order to ensure that the Company’s tax settlements are correct,
  • ensuring transparency of tax settlements;
  • investing in employee training and using support from professional advisors.

2. Detailed part
2.1 General global procedures

At the Group level, procedures are in place to ensure ethical conduct and legal compliance in the business of the Group members, which also indirectly affect the proper fulfilment of tax obligations. The said procedures include, but are not limited to:
 Code of Ethic, Conduct and Behaviour
The code of ethic, conduct and behaviour for the Group companies and their staff has been established in order to ensure ethical and moral principles for the conduct and operation on the market of agricultural products at the Group level.
 Company Standard, Mission, Vision, Values
The document describes the Group’s philosophy.
 Policy on Unlawful Activities Risk Mitigation
All employees, contractors as well as any parties cooperating with the Group are obliged to abide by the said policy.

2.2 Detailed procedures

In cooperation with the accounting services provider which supports the Company, the Company has implemented measures and procedures (both in a written form as well as in the form of practical processes) in order to ensure that the Company properly meets its tax obligations. The said procedures include, but are not limited to:

  • The Company’s accounting policy;
  • The procedure for verification of contracting parties (verification regarding the entity and the object);
  • The global procedure for the fulfilment of the tax scheme reporting obligations which sets out the rules for the Company’s fulfilment of the obligations regarding tax scheme identification and reporting;
  • The procedure for verification of bank accounts of contracting parties while making payments in order to comply with the statutory obligation to verify the contracting party on the so-called Whitelist of the Ministry of Finance,
  • The procedure regarding the obligatory use of the split payment mechanism – which sets out the mode of making payments for goods or services purchased against an invoice where the total amount payable exceeds PLN 15,000, using the split-payment mechanism in accordance with Article 108a.1 of the VAT Act;
  • The VAT due care procedure – the purpose of that procedure is to comply with the highest standards of due care in settlements regarding the tax on goods and services. The procedures governs, inter alia, the verification of the possibility to apply 0% VAT rate and two-step verification of VAT settlements – at the level of the Group’s finance department and at the level of the accounting firm which is in charge of reporting obligations.
  • The withholding tax procedure enabling to ensure correctness and completeness and to exercise due care while preparing withholding tax settlements.
  • The procedure for collecting and archiving documents regarding the fulfilment of tax obligations and the transactions effected;

2.3 Tax processes

The most important tax processes implemented by the Company include:

  • The process for verifying if it is possible to classify bad debts as tax-deductible costs;
  • The tax process for accounting for fixed assets;
  • The process for calculation of the tax on goods and services – carried out on a monthly basis;
  • The process for calculating the personal income tax – carried out for the purpose of calculating advance payments on account of income tax on a monthly basis, and carried out annually in order to calculate the total annual income tax liability and to file the tax return.

3. Information about the forms of voluntary cooperation with the National Revenue Administration

The Company understands voluntary forms of cooperation as such forms of cooperation between the taxpayer and the tax authorities that are provided for and regulated in relevant provisions of law, and which may be used depending on the concordant will of the taxpayer and the tax authority (a body of the National Revenue Administration). In particular, the Company understands voluntary forms of cooperation to include concluding and performing a cooperation agreement in respect of taxes for which the National Revenue Administration is competent, as referred to in Article 20s of the Tax Ordinance2, as well as those forms which relate to the conclusion and performance of such an agreement, namely:

  • a tax agreement as referred to in Article 20zb of the Tax Ordinance;
  • a tax audit as referred to in Article 20zg of the Tax Ordinance.

In the reported Tax Year, the Company did not apply voluntary forms of cooperation with the bodies of the National Revenue Administration. The Company, however, undertakes any and all necessary forms of cooperation with tax authorities for the proper fulfilment of its obligations under the provisions of tax law. In case of verification activities conducted by tax authorities, the Company provides information in compliance with the statutory deadlines or the deadlines appointed by the representatives of the KAS.

IV. Information regarding the taxpayer’s fulfilment of tax obligations in the Republic of Poland, together with information about the number of tax scheme reports submitted to the Head of the National Revenue Administration split into the taxes to which they pertain

1. Information regarding the taxpayer’s fulfilment of tax obligations
The Company takes necessary measures with a view to proper and timely performance of the obligations under the provisions of tax law, in particular the Company:

  • identifies events which give rise to tax obligations or may cause doubts regarding taxes;
  • deepens the analysis of the factual status in order to identify – conducts throughout analysis of the provisions of tax law based on the current applicable provisions;
  • consults external tax advisors in respect of issues which may give rise to doubts regarding taxes.

In the reported Tax Year, the Company timely performed its tax obligations understood as:

  • calculating and paying the taxes – both as the taxpayer and tax remitter;
  • filing tax returns, documentation, records, information, declarations, notifications, reports or disclosures as referred to in the provisions of tax law;
  • fulfilling other obligations imposed on the Company by the provisions of tax law.

In the reported Tax Year, such tax obligations in the Republic of Poland comprised:

  • tax obligation on all the Company’s income, under Article 3.1. of the CIT Act – as the taxpayer of the corporate income tax;
  • tax obligation under Article 19a of the VAT Act3 – as the taxpayer of the tax on goods and services;
  • tax obligation under Articles 31 of the Act on the Personal Income Tax dated 26 July 1991 (consolidated text: Journal of Laws Dz.U.2021.1128 as amended; hereinafter: the PIT Act) – as the remitter of the personal income tax;

2. Information about the number of tax scheme reports submitted to the Head of the National Revenue Administration

In the reported Tax Year, the Company was not subject to any obligations with regard to submitting tax scheme reports (MDR-1) to the Head of the National Revenue Administration. Hence, the Company submitted no tax scheme reports.

V. Related-party transactions or the taxpayer’s restructuring activities

1. Information about related-party transactions in the meaning of Article 11a.1.4 of the CIT Act of a value exceeding 5% of the balance sheet total of assets in the meaning of accounting regulations, determined on the basis of the latest approved financial statements of the company, including transactions with entities which are not tax residents of the Republic of Poland

In the reported Tax Year, the Company concluded related-party transactions of a value exceeding 5% of the balance sheet total of assets in the meaning of accounting regulations, determined on the basis of the latest approved financial statements of the Company, including transactions with entities which are not tax residents of the Republic of Poland:

Sales transactions

In the reported Tax Year, the Company sold grain (triticale, rye, wheat) to INTERGRAIN S.A., the transaction value: PLN – 24,107,838.30;

Purchase transactions

In the reported Tax Year, the Company bought soybean meal for further distribution from the following related parties:

– Trade House “Sodrugestvo” Ltd, transaction value – PLN 115,724,701.98;
– Closed Joint Stock Company Agroprodukt; transaction value – PLN 12,858,441.91;
– Sodrugestvo Soy Closed JSC, transaction value – PLN 9,763,899.96
– Belagroterminal Ltd, transaction value – PLN 63,993,173.60

The Company concludes the related-party transaction each time in accordance with the same terms and conditions as those applying to transactions with independent parties, namely on an arm’s length basis. The Company’s concluding transactions with related parties each time results from substantiated needs of the Company or of the related party.

All the related parties which whom the Company carried out transactions in the reported Tax Year were non-residents.

2. Information about restructuring activities planned or undertaken by the taxpayer, which could affect the amount of tax liabilities of the taxpayer or its related parties in the meaning of Article 11a.1.4 of the CIT Act

The provisions which set out the obligation to prepare and publish the information on the implemented tax strategy do not contain a legal definition of the term “restructuring activities” for the purpose of that obligation. Given the fact that this information is a document pertaining to taxes, the definition of the said term should be sought in regulations regarding the area of taxes. In accordance with § 2.1 of the Regulation of the Minister of Finance of 21 December 2018 on Transfer Pricing regarding Corporate Income Tax (consolidated text Journal of Laws Dz.U.2021.1444 as amended), for the purpose of the said regulation restructuring is understood as a reorganisation which (a) includes a significant change of trade or financial relations, including the termination of effective agreements or amendments to their material terms and conditions, and b) which involves transfer of functions, assets or categories of risks between the related parties, if as a result of the transfer the taxpayer’s expected average annual earnings before interest and taxes (EBIT) in the three-year period after the transfer would change by at least 20% of the expected average annual EBIT over the same period if no such a transfer had been made.
Hence, given the definition quoted above, in the Tax Year the Company neither planned nor undertook any restructuring activities which could affect the amount of tax liabilities of the Company or its related parties in the meaning of Article 11a.1.4 of the CIT Act. In particular, Widar did not undertake the following activities:

  • business combination;
  • transformation into another company;
  • contributing the company’s enterprise or an organised part thereof to another company (also as a part of the company’s demerger);
  • exchange of shares.

VI. Information about applications for tax rulings

1. Applications for a general tax ruling as referred to in Article 14a § 1 of the Tax Ordinance

In the reported Tax Year, the Company filed no applications for a general tax ruling.

2. Applications for an individual tax ruling as referred to in Article 14b of the Tax Ordinance

In the reported Tax Year, the Company filed no applications for an individual tax ruling.

3. Applications for binding rate information as referred to in Article 42a of the VAT Act

In the reported Tax Year, the Company filed no applications for binding rate information.

4. Applications for binding excise duty information as referred to in Article 7d.1 of the Excise Duty Act

In the reported Tax Year, the Company filed no applications for binding excise duty information.

VII. Information regarding settlements in territories and countries applying harmful tax competition

In the reported Tax Year, the Company made no tax settlements in territories or countries applying harmful tax competition as referred to in:

  • the Regulation of the Minister of Finance dated 28 March 2019 identifying the countries and territories applying harmful tax competition in the field of corporate income tax (Journal of Laws Dz.U.2019.600 dated 29 March 2019),
  • the Announcement of the Minister of Finance, Funds and Regional Policy dated 26 February 2021 on the publication of the list of countries and territories indicated in the EU list of non-cooperative jurisdictions for tax purposes adopted by the Council of the European Union, which were not included in the list of countries and territories applying harmful tax competition issued on the basis of the provisions on personal income tax and the provisions on corporate income tax, and on the date of adoption of this list by the Council of the European Union (M.P.2021.225 dated 1 March 2021);
  • the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes 2021/C 66/10 (O.J.UE C 64 dated 26 February 2021).
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