Draft law Tax Ordinance assumes the introduction into Polish tax jurisdiction of the possibility of entering into compromise solutions in relations between the tax authority and the taxpayer. To this end, the drafter proposed, inter alia, the introduction of provisions containing the basic regulation of the correct settlement programme. The scheme provides for the conclusion of an interoperability agreement based on the cooperation of the tax authority with the taxpayer.
New Tax Ordinance to facilitate cooperation between authorities and taxpayers. To this end, provision has been made for mediation (cf. article Tax Mediation – a new institution in tax law), tax agreements (cf. article Tax Agreement – an attempt to strengthen fiscal ties and the taxpayer) as well as cooperation agreements that we will look at today.
The cooperation agreement aims to ensure compliance with tax law by establishing close relations between tax authorities and taxpayers. This agreement, according to the project promoter, will be concluded in writing for an indefinite period.
On the other hand, each party will be able to decide whether to withdraw from the cooperation agreement. Except that the termination of the cooperation agreement by the Head of the National Tax Administration will depend on two conditions i.e.
non-compliance by the taxable person with the terms of the contract and due to serious or repeated infringements of tax law.
Suggested three different means of implementing the Collaboration Agreement:
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- one-sided declaration or declaration by the administrative authority,
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- a card adopted jointly by or on behalf of all interested parties, or
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- formal or informal individual agreement between the tax authority and the taxpayer
From the bill of amendment Tax Ordinance it follows that the cooperation agreement can be concluded between the Head of the National Tax Administration and a taxable person of significant economic importance. The category of taxable person of significant economic importance would be determined by the Minister responsible for public finances and the classification would be based not only on the type of activity carried out but also on the amount of net income achieved.
From the bill of amendment Tax Ordinance it follows that the cooperation agreement can be concluded between the Head of the National Tax Administration and a taxable person of significant economic importance
We can also learn from the project that: “tax collectors will not be entitled to conclude a contract, i.e. they will not be able to require the tax authority to conclude it on the basis of legislation.
[...] By analogy, the tax authority will not be able to require the taxpayer to enter into this relationship and assume specific obligations related to it.
Nor will he be able to produce negative consequences for the taxpayer from the fact that he is not interested in concluding a cooperation agreement." Which means that the conclusion of a cooperation agreement will be voluntary.
On the other hand, it should be noted that the co-operation agreement also aims to increase the efficiency of identifying taxpayers who fail to fulfil their tax obligations and who do not participate in this programme.
As a consequence, the correct implementation of tax obligations is assumed to be increased, both among taxpayers covered by the cooperation agreement and not covered by it.
We also learn from the draft law that the Head of the National Tax Administration may decide to carry out a preliminary audit with the taxpayer before concluding the cooperation agreement. The preliminary audit would aim to assess the tax risk identified by the taxpayer requesting the conclusion of the cooperation agreement.
In conclusion, the signing of a co-operation agreement aims to ensure that the taxpayer complies with tax law under conditions of mutual trust between the tax authority and the taxpayer.
The optimistic approach to the possible effects of the tax authority's interaction with taxpayers is based on similar projects implemented in other countries. The tax authorities will be able to impose on the taxpayer the obligation to make its activities transparent through a cooperation agreement.
The taxpayer would be able to consult its doubts as to the correctness of tax settlement and would thus disclose to the tax the details of its activities. The greatest benefit on the part of taxpayers would be to increase the certainty of tax law and the possibility of spending planning, which could reduce tax risk.
Author: Paweł Boś, Law student at Leon Kozminski Academy in Warsaw, employee Russell Bedford