Main assumption of the new Tax Ordinance, i.e. increasing the scope of cooperation and trust on the line of tax officials, is to be met, inter alia, by introducing a tax agreement. If it is to succeed, the authority's authoritarian approach to tax payers would have to change.
According to the proposed solutions, co-operation with the tax would pay more than previously. In exchange for providing the tax authorities with information on their internal accounting procedures or systems, taxpayers would receive information from an office which would propose legal solutions instead of drawing consequences.
It is doubtful that offices or taxpayers will in general initiate tax agreements, and it is highly likely that even when they do, their provisions will not be binding, because the ruling also gives a lot of gate to reject them.
By consensus
The proposed legislation presents a utopian picture of cooperation between tax authorities and taxpayers. This is a partnership relationship based on cooperation, transparency and mediation. The specific solution to implement the assumptions is the tax agreement described in the chapter 10 Tax Ordinance according to its design dated 8 March 2019
It is intended to apply:
- • in the event of doubts as to the facts of the case, including where their removal would entail excessive difficulties or costs disproportionate to the outcome;
- • the nature or value of the transaction, activity or event;
- • the application of reductions in the payment of taxes, in particular the type of reduction to be applied and the manner in which it is applied;
- • on specific issues arising from the tax investigation;
- • where the special provision so provides.
The tax agreement must not: rely on arrangements relating directly to the dimension. Nor may it apply to grounds for the determination of tax avoidance within the meaning of Article 33 or contractual anti-tax avoidance clauses, or abuse of rights within the meaning of Article 5(5) Act dated 11 March 2004 on tax on goods and services.
The provisions of the agreement are binding, but there are several exceptions to this rule. That is to say, the Authority may not recognise the contract if it has been concluded in breach of the law or where there are grounds for reopening or annulling the decision.
The tax authority may also fail to take into account the findings of the tax agreement in a dimensional decision issued as a result of a mutual agreement or arbitration procedure conducted on the basis of a ratified double taxation agreement or another ratified international agreement to which the Republic of Poland is party.
The Authority may also fail to take into account the findings of the tax agreement in the dimensional decision adopted using Article 33, Article 5(5) Act dated 11 March 2004 a tax on goods and services or other anti-tax avoidance provisions or measures limiting contractual benefits.
Partnership or literary fiction
The tax contract institution is taken from the Dutch tax system, where it has been operating successfully for years. However, the offices in Poland are different from those in the Netherlands.
We want to believe that they will benefit from the new solution, which is the tax agreement, but trust in the success of this solution is being undermined by the current practice, in which the tax usually uses the information obtained for the benefit of the state, not the taxpayer, even in cases where we are dealing with negligence, not a gross mistake.
It is doubtful that the offices or taxpayers will in general initiate tax agreements, and it is highly likely that even when it comes to them, their records will not be binding, because the ordination also gives a lot of gates to reject them.
Author:
Katarzyna Kołbuś - Editor leading RB Magazine. From Over 10 years related to industry press, including the Financial Gazette and portal ipip.com.pl, which is devoted to finance, taxation, law, politics and the economy. She graduated from Polish philology at the UMCS and the linguistic text editing at the University of Warsaw