one of the issues developed in the framework of the draft amendment of the Tax Ordinance to come into force from 1 January 2020, there is a change in the rules for determining the market value of the subject-matter.
Under the current regulation in the event of a dispute between the taxpayer and the tax authority as to the correct amount of such value, a specific procedure is provided for which, in the cases at issue, an expert opinion or an expert valuation is required. The proposed amendment is intended to amend this procedure by "simplifying" it so that the use of an expert or expert opinion will no longer be mandatory. This will only be a possibility which the tax authority will be able to use or not.
Apparent protection of the interests of taxpayers
In response by the MF to the parliamentary interpellings in this case (SP5.054.16.2018 of 15 November 2019) it was pointed out that the proposed amendment was guided by the intention to protect the interests of the taxpayer by reducing the duration of the proceedings, reducing its costs and harmonising the procedure for determining the market value to be the same for all property taxes. The MF does not recognise the risk to taxpayers, in particular it does not fear any assessment by the tax authorities, as it assumes that the principal principle will be to determine the value of the taxpayer on its own, and only if the authority considers that this value deviates significantly from the market value, the tax authority will be required to indicate the values and the grounds for calculating it.
The obligation to indicate these conditions with full transparency of the activities of the tax authority, the availability of an information system in which the transactional prices and property rights are recorded, combined with the possibility (not mandatory) to accept the expert’s opinion as evidence in the proceedings, is, in the opinion of the project authors, a sufficient guarantee to protect the interests of the taxpayer.
Difficulties instead of simplifications
The need to improve the procedures for establishing the tax base, the use of IT systems in this case is increasingly common and, in some cases, sufficient, but the proposed solution, where there is no clear obligation to consult an independent expert or expert, can be too far-reaching simplification.
Of course, the argument put forward by the project's authors that the expert's opinion can still be established as evidence in the case and should be assessed in accordance with the rigour laid down in the tax rules is correct, but only in part.
The problem is that such an assessment of evidence can be questioned most often only in the administrative or judicial and administrative course of the instance (revocation from the decision, later the complaint to the administrative court) which means that a taxpayer who wants to defend the value of the transaction will in many cases have to face longer and more expensive proceedings to prove his position.
This is now possible yet on first the stage of the procedure, immediately before the authority.
Author
Leszek Dutkiewicz
Partner at Russell Bedford. From 2011 related to Russell Bedford Poland. In years 2008 – 2011 worked for leading consulting companies (Ernst&Young, KPMG, BDO) providing tax advisory services. He specializes in tax and economic law, primarily in international tax law, tax proceedings, VAT and transaction prices.
Author of a publication on tax, civil and international law issues. Lecturer in tax law training. He has legal education, in 2008 graduated from the Faculty of Law and Administration of the Jagiellonian University.