Tax Ordinance Research Articles

Exercise of a party's rights to active participation in administrative proceedings. Selected issues in the context of self-government boards of appeals rulings

Self-Government Boards of Appeals (SBoAs) act, within their statutory competence, as bodies of higher instance, within the meaning of the Code of Administrative Procedure and the Tax Ordinance Act, in individual public administration matters falling within the jurisdiction of local governments, unless specific provisions of law provide otherwise. In view of this, inevitably, their adjudicatory practice relies, among other things, on the direct application of general principles articulated in the Code of Administrative Procedure and the Tax Ordinance Act, especially in terms of ensuring active participation of the parties in the appeal proceedings. Given the specificity of the court operating as a quasi-judicial body, the article analyses the interplay between the general principles related to active participation of the parties to proceedings and outlines difficulties (and challenges) related to the issues discussed. The study was conducted by employing the formal and dogmatic method, as well as auxiliary legal-historical method, with a view to presenting the normative context of the adopted legal solutions. Moreover, the conduced analysis of court and tribunal jurisprudence allowed inclusion of the practical aspects of the general principles in question and their application.

The problem of overpayment of tax in the case of transferof property or other right to property for tax arrears

The question of the admissibility of the application of the provisions on the overpayment of tax in the case ofa transfer of property or another property right against a tax arrears that turned out to be non-existent or existingto a lesser extent than assumed is the subject of divergent jurisprudence of administrative courts and statementsof doctrine. The article analyses the recent line of jurisprudence in favour of the application of the said provisions.It discusses the weaknesses of the argumentation contained in the justifications of the judgments and the consequencesof the position presented therein. The author advocates the view that the non-existence of a tax arrearsin the assumed amount results in the collapse of the causality (cause) of a contract concluded pursuant to Article66 of the Act of 29 August 1997. - Tax Ordinance, and as a result, in principle, the invalidity of the made transferof property or right. For this reason, in his opinion, there are no grounds for the application of the provisions onoverpayment of tax.

Suspension of the limitation period due to notification ofthe legal successor about the initiation of proceedings ina case concerning a tax crime or tax off ense

The article discusses the controversies related to Article 70 6 point 1 of the Tax Ordinance Act of August 29,1997, which provides for the suspension of the limitation period for tax liabilities in the event of initiating proceedingsfor a tax crime or tax offense. Referring to the controversies previously discussed in doctrine and case law,concerning the lack of a requirement to notify the taxpayer about the initiation of proceedings and subsequentlythe instrumental use of tax crime proceedings to suspend the limitation period for tax liabilities, the article raisesthe question of the effectiveness of suspending the limitation period due to notifying the taxpayer’s legal successor.The practice of initiating proceedings against the legal successors of the taxpayer after the cessation of itslegal existence or transformation of its legal form applies, for example, to situations where a company, againstwhich tax authorities have initiated a control or tax proceedings, undergoes a division through acquisition. Adoptingthe primacy of the literal interpretation of Article 70 6 point 1 of the Tax Ordinance, it should be consideredthat the suspension of the limitation period due to notification of the legal successor is ineffective. On the otherhand, applying a purposive interpretation allows preventing practices of avoiding tax liability by taxpayers undergoingreorganization.

Administrative proceedings vs. Tax proceedings

Tax proceedings are a separate type of administrative proceeding, which is conducted by tax authorities. It has the character of an authoritative, public-law concretization, a unilateral legal relationship in the field of tax law. The provisions governing the proceeding include both the Tax Ordinance and the Code of Administrative Procedure. The purpose of tax proceedings is to assess tax... Administrative proceedings are both a series of procedural actions, regulated by procedural law, taken by public administration bodies and other procedural entities to resolve an administrative matter in the form of an administrative decision, and a series of procedural actions taken to verify a previously issued administrative decision. Administrative procedure, also called formal administrative law, procedural administrative law or administrative procedure, is one of the three parts of administrative law.

Liability of Former Members of the Management Board ofCapital Companies for Public Law Obligations

The article concerns the complex and multifaceted issue of financial liability of former members of the managementboards of capital companies for the company’s obligations, especially in the context of tax liabilities. Thereis a complexity resulting from intertwined legal regulations contained in the Commercial Companies Code andthe Tax Ordinance. Key issues discussed in the text include: the compensatory nature of liability, differencesbetween the treatment of civil and tax liabilities, and specific legal situations arising from both mistakes and intentionalactions of the management board in the context of obligations. Particular attention was paid to the judgmentof the Constitutional Tribunal, which considered the liability of a former board member and the possibilityof defending against creditors’ claims while simultaneously lacking access to documentation and legal tools afterleaving the position. The final question concerns the impact of this verdict on public law regulations and its applicationin the context of tax law.

Tax-legal and economic-management determinants of the liability of the health resort fee collector

ObjectivesThe role of the tax collector is to facilitate the fulfilment of tax obligations by taxpayers. The applicable tax laws provide for the possibility to use it for the collection of taxes constituting the income of local government units, while the decision-making on the ordering of tax collection by means of collection, the determination of collectors and the amount of remuneration for collection is entrusted to municipal councils by means of acts of local law (resolutions). The entities on which the municipal councils impose the obligation to collect tax by way of collection are obliged to perform it.Material and methodsThe first is combined with needs of a theoretical or cognitive nature, that is, it includes all those needs that are associated with the development of a particular science. The second is combined with the various needs of practice.ResultsAnalysing the issue of collection of the health resort fee and the legal regulations governing the tasks and responsibilities of the collector, the following conclusions can be formulated.ConclusionsCollection of taxes by way of collection may only take place with regard to taxes the amount of which is directly prescribed by law or the tax authority is obliged to calculate the tax. The provisions of the Tax Ordinance do not impose an obligation on the tax collector to calculate the amount of the tax.

Presentation of Budgetary Balance as an Argument Justifying Granting Tax Payment Relief: Scope of Control of Discretionary Decisions by an Administrative Court

The author analyzes a ruling of the Voivodship Administrative Court in Lublin concerning the application of Article 67a of the Tax Ordinance. The judgment in question raises the issue of the extent to which an administrative court can review the actions of a tax authority when exercising administrative discretion. The author agrees with the court in Lublin that the authority’s decision in this regard should consider criteria that align with the recognized constitutional values in tax collection. In this regard, one hopes that the court’s ruling will be the prevailing line of jurisprudence that will significantly improve the taxpayer’s procedural position within the framework of the procedure for granting tax payment relief. Furthermore, the author examines the practical implications of arguments related to the preservation of budgetary balance for both the municipality (which applied for relief from the payment of a tax liability) and the State Treasury. In this respect, the author’s basic thesis is that the argument of the preservation of budgetary balance should be taken into account when reviewing the legality of the tax authority’s decision at hand. However, this cannot be an argument that once provided will exclude the possibility of granting of tax payment relief in every instance.

Status byłych wspólników spółki cywilnej i rozwiązanej spółki cywilnej jako podmiotów gospodarczych a ich legitymacja na gruncie prawa publicznego gospodarczego – wybrane przykłady

A civil partnership company and partners of a civil partnership, as well as former partners of a civil partnership after its dissolution, may have different legal statuse in various areas of law. The law should protect the interests of persons and entities that will be affected by the outcome of the case. Under civil law, the rights of former partners of a civil partnership company can be considered as protected, but the situation is different on a ground of public economic law, using the example of tax law. Some provisions have been introduced in legal act guaranteeing former partners the right to participate in the proceedings as a party in the event that they are entitled to refunds or overpayments of VAT tax from the State Treasury. In other areas, despite the content of Article 133 in conjunction with Article 115 of the Tax Ordinance Act, as well as the content of Article 25 in conjunction with Article 26 in conjunction with Article 33 of the Law on Proceedings before Administrative Courts, the jurisprudence does not grant former partners of a civil partnership company the status of a participant with the rights of a party in the proceedings, nor does it recognize their legal interest. For example, they do not have the right to question the decision on the assessment of VAT tax on the substantive level. This means that they cannot control the tax assessment decision, even though they are liable under Article 115 of the Tax Ordinance for tax liabilities of a civil partnership company. Moreover, the provisions of tax law do not expressly provide for the legal succession of former partners in the event of dissolution of a civil partnership. Such a situation is unacceptable if it prevents and closes the appeal route and the court route to a fair and public consideration of the case for former partners of a civil company, guaranteed by the provisions of the Polish Constitution.

CONSEQUENCES OF THE IMPOSSIBILITY OF FULFILLING TAX OBLIGATIONS

The impossibility of fulfilling tax obligations may have many causes, but nowadays the importance of potential impossibility increases significantly due to the historically unprecedented dependence of the tax system on factors of technical and IT nature. The author, for the purposes of tax law, adapts various types of impossibility of performance established in civil law. He also finds it acceptable to use the concept of impossibility both in relation to the obligation to pay a tax and in relation to the so-called instrumental tax obligations. He discusses the ways in which cases where tax obligations could not be fulfilled have been dealt with to date, taking into account both the jurisprudential concepts of the Polish administrative courts based on the principle of impossibilium nulla obligatio est and the legislative solutions introduced in Ukraine in connection with the 2022 invasion by the Russian Federation, in Poland in connection with the war started in 1939 by the German Third Reich, as well as the regulations introduced into the legal systems of various countries in connection with the COVID-19 pandemic and the new regulations on the Polish National Electronic Invoice System enacted on 16 June 2023. In addition, the author analyses the possibility of using, in the scope discussed, the provisions of the present Tax Ordinance on reliefs in payment of tax obligations. The study indicates the need to introduce general provisions on the impossibility of fulfilling tax obligations. In the author’s opinion, these should address cases of impossibility differently depending on their nature and whether they relate to obligations to pay tax or to instrumental tax obligations.

The Functioning of Tax Authorities in Countries of the European Union

The paper delves into an insightful analysis of tax authority operations in various European Union (EU) member states, including Poland, Sweden, Germany, and France. This study seeks to extract valuable lessons from their practices and apply them to the context of Ukraine. Poland's tax authority, governed by the Tax Ordinance, serves as an interesting starting point for the investigation. Sweden's National Tax Agency, operating under the Swedish Ministry of Finance but independently of the government, takes centre stage as a model of centralised tax administration based on functional principles. In contrast, France's tax system integrates its state tax service into the Ministry of Economy, Finance, and Budget, showcasing a unique structural arrangement. Notably, Germany stands out with its highly proficient tax service, emphasising the importance of professional expertise in tax administration. In conclusion, this study underscores the universal nature of lessons learned from the organisational activities of tax authorities in EU member states. By implementing these insights, Ukraine can take significant steps toward optimising its tax administration, fostering trust between taxpayers and authorities, and aligning its practices with international standards. Ultimately, the paper serves as a valuable resource for policymakers and tax professionals seeking to enhance Ukraine's tax authority operations.

Supreme Court Resolves Question on Treatment of Concealed Production or Sales

Pakistan’s Income Tax Ordinance 2001 empowers the tax authorities to make amendments or reamendments to assessments of income tax, including in situations where income has escaped assessment due to concealment or underreporting. The income tax law also contains numerous measures to counter tax avoidance and evasion. While these various separate provisions should be complementary, in this article, the author analyses an important issue that arose between taxpayers and tax authorities regarding the interpretation and application of two of these provisions and discusses the decisions of the appellate authorities in resolving the matter.

Glosa do wyroku Naczelnego Sądu Administracyjnego z dnia 25 sierpnia 2022 r. (III FSK 1262/21)

Commentary is devoted to the issue of the head of the tax office’s refusal to issue a notary public with a certificate confirming that the acquisition is exempt from tax, that the tax due has been paid or the tax liability has expired due to the statute of limitations. The aim is to show that this obligation cannot be identified with the fact that the notary public is entitled to apply for the issuance of this certificate pursuant to Article 306a of the Act of 29 August 1997 – Tax Ordinance on its own behalf and for its own benefit as the addressee of Article 19 (6) of the Act of 28 July 1983 on inheritance and donation tax in a situation where he is only to prepare a notarial deed documenting the sale of shares.

Tax authorities’ access to information covered by banking secrecy with regard to the right to privacy

The institution of banking secrecy is regulated in legislation that is at the interface between the regulations of public and private law. This type of solution may lead to a conflict of interests ‒ private and public ones. The issue of tax authorities’ access to information covered by banking secrecy requires consideration in relation with the provisions of several legal acts. The procedure for obtaining information covered by bank secrecy provided for in Articles 182–185 of Tax Ordinance as well as the duty to take into account the principle of special trust between a client and a financial institution, are directives referring to the principle of conducting proceedings in a way that inspires trust in tax authorities, while the practice of making information available to tax authorities under Article 49(2) of the Act on the National Revenue Administration in fact deprives the parties of procedural safeguards. In the case of competitiveness of protected goods, it is necessary for the legislator to regulate the disputed issues in compliance with the constitutional requirements of standardisation and a clear and legible balance between the interests in conflict. It should therefore be concluded that when introducing new legislation on the matter of interference in the right to privacy, the legislator is obliged to balance the competing valuses with particular care. The balance between the taxpayer's privacy and the public interest does not seem to have been preserved in the scope of the subject matterin question.

The Impact of Abstract Control by the Constitutional Court on the Recovery of Property Tax Overpayments: Procedural Issues

Abstract One of the powers of the Polish Constitutional Tribunal is the so-called abstract control related to the examination of the compliance of statutes (laws) with the Polish Constitution. The subject of these statutes may be tax matters. In recent years, the tribunal has repeatedly ruled on the consistency of such legal acts with the Constitution, including the reference to the provisions of the Law on local taxes and fees, which regulates a real-estate tax. Some of the rulings thereon were interpretive in nature, i.e. they indicated inconsistency with the Constitution within a specific understanding of the provision under verification. Their direct consequences were claims for excess tax made by real-estate taxpayers, which were envisaged by the procedures prescribed by the provisions of the law – the Tax Ordinance. In this regard, significant shortcomings of the above-mentioned act have been revealed. We may put forward a thesis according to which the procedure provided for in the Tax Ordinance for the recovery of excess tax in connection with the Constitutional Tribunal’s rulings is defective as, in particular, it does not take into account the rulings which are interpretative in nature. Verification of this research assumption requires the analysis of both the statutory provisions on the recovery of excess tax and the rulings of administrative courts that have been made thereon. The rationale for discussing this issue is its great practical importance, in particular, as indicated above, the fact that in recent years the judgments issued by the Constitutional Tribunal with regard to the Law on local taxes and fees regulating a realestate tax have precisely been of an interpretative nature.

Tax Confidentiality as a Limitation in the Procedure for Public Control of the State of Public Finances

AbstractAny control, regardless of the field to which it relates, requires information. This claim is also valid in the field of citizen’s control. For an individual to be able to effectively assess what is going on around him or her and make sound decisions on that basis, he or she must be able to obtain a variety of information, including, above all, information that is comprehensive public knowledge. According to what follows from the regulations of the Act of 6 September 2001 on access to public information, their catalogue is broad and, more importantly, open. Although on the surface it might seem that the individual does not need anything more, it should not be forgotten that the same legislator determines a number of restrictions that block or completely close the way to certain pieces of public information. This group of statutory restrictions includes tax confidentiality as defined by the Tax Ordinance Act of 29 August 1997. The main objective of the considerations undertaken in this article is to determine to what extent tax confidentiality by its very nature restricts the process of public scrutiny of the state of public finances, taking into account its subjective and objective scope and its positioning among all the premises limiting accessibility to public knowledge.

Tax Control and Customs and Fiscal Control in Cases Where a General Anti-Avoidance Rule May Apply

Abstract Pursuant to the provisions of the Tax Ordinance, if an anti-avoidance clause may apply in a tax control or a customs and fiscal control, the Head of the National Fiscal Administration (NFA), at the request of the control body, takes over such control in whole or in part and initiates tax proceedings within its scope. The control will be continued if no decision using the GAAR is issued in the tax proceeding carried out by the Head of the NFA. Detailed regulations define the procedure and effects of the Head of the NFA taking over control, but do not remove doubts related to the condition that it should take place as a result of an application to the Head of the NFA and the possibility of taking over the case only in part, and the effects of such partial takeover.

The Comparison of Premises for Recognizing Tax Books as Kept not Compliant in the Tax Law and Accounting Law in Poland

The purpose of this article. The purpose of the paper is to compare and assess provisions on premises for recognizing tax books as kept not compliant to the regulations in the tax law and accountancy law as well as to discuss the possibility of using the tax judgments on this issue in the interpretation of compliant account books in the accountancy law. The research hypothesis is as follows: The tax judgments on the premises for recognizing tax books as kept not compliant may be also used directly for the interpretation of compliancy of account books in the accountancy law. Methodology. The descriptive study including critical attitude to the legal acts and literature was used to solve the research problem. The result of the research. Both the tax law and accountancy law comprise the rules for recognizing tax books (account books) to be compliant to the regulations. The tax law uses the terms of the reliability and correctness. The Accountancy Act law uses the terms of the reliability, error-free, verifiable manner and on an on-going basis. Although definitions of reliability are very similar, as the analysis shows, the character of reliability of tax books is not always the same as for account books. The judgments in the field of interpretation of the reliability for tax purposes may not always be used for accounting purposes. The term correctness in the Tax Ordinance does not always correspond to the terms: error-free, verifiable manner and on an on-going basis in the Accountancy Act. So, the tax judgment concerning correctness of the tax book from the tax law cannot be directly applied into the interpretation of such terms as error-free, verifiable manner and on an on-going basis in the accountancy law. The paper additionally proposes some changes to the tax law concerning the unreliability of tax books, as well as changes to the Accountancy Act.

Glosa do wyroku Naczelnego Sądu Administracyjnego z dnia 26 lutego 2019 r. (II FSK 3436/18)

This commentary on the judgment of the Supreme Administrative Court of 26 February 2019 discusses one of the premises for the reopening of tax proceedings, resulting from Article 240 § 1 (5) of the Polish Tax Ordinance. The reveal of new facts or new evidence relevant to the case, previously unknown to the tax authority, continues to be a matter of legal disputes between taxpayers and tax offices before administrative courts. The commentary analyzes four judicially and doctrinally established criteria that have to be met in order to reopen the proceedings. The Supreme Administrative Court’s arguments given in the judgment are developed in the process. Emphasized is the exceptional nature of the discussed premise for reopening the tax proceedings and the impossibility of using it as a kind of additional instance of appeal against a decision.

Analiza art. 233 § 3 Ordynacji podatkowej w kontekście zasady dwuinstancyjności postępowania wynikającej z art. 78 Konstytucji RP

The principle of two-instance proceedings is one of the most important procedural guarantees which aim to ensure the respect of individual rights. This principle has been regulated in article 78 of the Constitution of the Republic of Poland. In the system of law, the rule is that the appellate body may adjudicate both reformatively and cassationally. One exceptions to this rule is provided for in article 233 § 3 of the Tax Ordinance. If the appeal is successful, this provision empowers the local government appeals board only to overrule the decision issued by the first instance authority on the basis of administrative discretion. The aim of this article is to analyse article 233 § 3 of the Tax Ordinance in the context of the principle of two-instance proceedings. In the opinion of the author of this paper, this provision constitutes an unjustified limitation of the right to two-instance proceedings.

Zasady pragmatyzmu w postępowaniu podatkowym

The article refers to one of the changes included in the Tax Ordinance Project prepared in 2017 by the General Tax Law Codification Commission, which introduced the so-called principle of pragmatism into the group of general principles of Polish tax proceedings. This principle, previously unknown in Polish tax proceedings, provided for the possibility not to initiate or to discontinue initiated tax proceedings if they concerned cases which did not fall within the "triviality limit", set at PLN 50. The study points out that it is necessary to take into account the needs of fiscal penal law when introducing the discussed principle into tax proceedings, considering its subsidiarity in relation to tax law and, more broadly, financial law and the ways it is understood in the Polish doctrine of criminal law. The authors conclude that the proposed principle of pragmatism in tax proceedings is an institution identical to the principle of opportunism in criminal proceedings, although it has more specific statutory prerequisites for its application than its criminal law prototype. They also indicate the necessary de lege ferenda actions in the field of prerequisites for prosecuting criminal offences, should the principle be codified.