The list of legislative and programming work of the government published information on planned changes to the legislation Act dated 17 June 1966 about enforcement proceedings in the administration. On 12 November the content of the project and the justification for the planned changes have been published. The following article will briefly discuss the most important changes.
According to the explanatory memorandum to the attached draft law on the amendment of the provisions of the Law on Enforcement in Administration and certain other laws (list number UD143, hereinafter referred to as the draft law), the purpose of the amendments is to improve the ‘initiation and conduct of administrative enforcement and to increase the efficiency of the creditor and enforcement body to the extent necessary’[1].
In addition, the legislator points out the need to introduce solutions enabling the compulsory recovery of duties on goods and services (hereinafter: VAT) cleared in a special procedure from an entity established outside Poland.
This draft was prepared taking into account the changes introduced by the Amending Act dated 4 July 2019 amending the Law on Enforcement in Administration and certain other laws (Journal of Laws, item 1553, as amended), which will become applicable In 2021
Enforcement of VAT cleared in specific procedures
This amendment follows from the specific procedures referred to in Council Regulation No. Regulation (EU) 282/2011 dated 15 March 2011 laying down implementing measures Directive 2006/112 on the common system of value added tax (Official Journal of the European Union L, No. 77 to 23 March 2011, p. 1, as amended).
They are intended to facilitate the exercise of value added tax obligations on transactions of entities resident or established in the territory of a country other than the country of consumption, where the tax is normally paid.
Current legislation Act dated 17 June 1966 on enforcement in administration (Journal of Laws of 2020, items 1427, 1492, Further: u.p.e.a.) do not contain standards enabling the compulsory investigation of the tax cleared in such a procedure where the transaction takes place in the territory of Poland, and where the declaration is made is another country, according to the registered office or the place of residence of the taxpayer.
In order to enable the enforcement of the administrative declaration lodged in the Member State of identification, the project shall include in the catalogue the documents on which the administrative execution is based.[2], indicating the VAT monetary charge.
The expression of this amendment is the addition of this declaration to the catalogue of documents which may form the basis for the issue of an implementing title and for the initiation of executions.[3].
Declarations made in other Member States will form the basis for such execution despite not having proper instruction, as in this case the project waives the obligation described under Article 3a(2) u.p.e.a. The obligation to provide the obliged person with a warning prior to the commencement of the enforcement procedure and the order for discontinuance of proceedings enforcement[4].
In order to enforce such a claim, it will be necessary to issue a national implementing title which will form the basis for a request addressed to another country together with a single or foreign implementing title issued under the Act[5]. In addition, the components of the implementing title shall be modified[6], by adding a number by which he is obliged to be identified for tax purposes in another country, in respect of claims arising from declarations made in another country.
Simplification of the procedure for initiating enforcement and safeguard proceedings
The main line of changes in this respect is the legislator's resignation from the enforcement body's clause to refer to the administrative execution of the implementing title used in the execution of the cash claims. The proposal considers that this action is unnecessary in the context of the existing Article 29 u.p.e.a. This clause is to be granted only to the implementing titles and the arrangements for securing non-monetary obligations.
The project also allows automatic verification of the data contained in the implementing title with the data contained in the KRS where the implementing title has been transmitted via the electronic system[7].
It was also proposed to clarify the timing of the initiating of the execution where the notice of seizure was served on another entity other than the debtor of the claim, before the copy of the implementing title was served on the obliged person[8].
The initiation of administrative enforcement was extended to the moment of the notification of the seizure of a debt or other property right also to another entity other than the debtor.
The amendment also aims to specify that in these cases first the enforcement action may be to enter that right in the attachment protocol or to receive a document confirmed by the document receiving the document.
Enforcement of the assets of the obliged person and his spouse
In order to facilitate the enforcement of the common assets, the draft amendments to the Act require the creditor to provide the enforcement authority with information on the enforcement and enforcement title[9] the spouse of the obliged person, if the liability of the obliged person covers both the personal and the common assets and the creditor is in possession of such information.
This is to enable the enforcement authority to clearly identify the spouse. Among the required data, the project includes the name of the spouse, address and PESEL.
„For the same purpose, the creditor shall provide the enforcement authority with data relating to the current owner of the property or other property right charged with the tax lien or compulsory mortgage securing monetary receivables and interest on the failure to pay it within the time limit. The acquirer of property or property rights may be a natural person as well as a legal person or an organisational unit other than a legal person.’[10]
Change in the definition of remuneration
The project also extends the definition of remuneration.
In accordance with the current regulations of u.p.e.a., the concept of remuneration means: ‘remuneration and non-executive other cash benefits related to the work or function performed by the obliged person on the basis of an employment relationship and another basis, if the obliged person receives periodic cash benefits’[11].
After the entry into force of the bill, this term will be understood as “the remuneration for the work and other claims of the obliged person, including social security benefits in the event of sickness and maternity paid by the employer during the period of employment and during the period 12 months from the date of termination or termination of employment’
Other designed amendments
Other proposed changes include:
- limitation of the costs of the reminder – they will expire with the expiry of the monetary debt covered by them. If you take more than one claims, the costs of a limitation notice shall expire at the earliest date;
- Giving the creditor the option not to take action to apply enforcement measures if the amount of the monetary receivable does not exceed ten times the cost of the reminder, unless the period until the limitation period expires is less than 6 months;
Introduction of a rule on the confluence of seizure or property rights by at least two enforcement bodies. In such a case, it shall not be required to inform the judicial bailiff of the manner in which the cash is settled where he has not given the enforcement authority an endorsement enabling the execution of the total execution;
Regulation of a coincidence of judicial safeguards or of administrative safeguards with judicial safeguards. In such a case, the security for the same thing or property right shall be taken over by the enforcement authority, which as first has taken the seizure and, in the event of failure to determine that priority, the authority that has taken the charge of the higher amount of the claim[12];
Differentiating the rate of the enforcement fee depending on the method of enforcement or payment – the amendment introduces an incentive for non-cash payments in administrative execution. The enforcement fee on such payment shall be 10% either 5% cash, whereas the fee for cash payments is 11% either 6%[13];
Eliminate the obligation for the bank to hold funds occupied by the enforcement authority in the course of execution from the bank account. Project assumes resignation 7-the day-end period after which the bank transfers the amounts taken from the account of the debtor to the enforcement authority[14] for the immediate transfer;
Unification of the principle of burdening the creditor not enforced from the enforcement costs imposed also in the case of enforcement of the property or property rights acquired after the execution;
Clarifying the enforcement of the rights recorded in the shareholders' register by the possibility of calling on the company to transfer the amounts due to the obliged person to the enforcement authority, where the seizure of that right occurs by sending a notice of attachment to the entity keeping the register of shareholders;
The enforcement of mobility will be adapted to the provisions governing the protection of personal data and to customs law;
Improving the execution of real estate by, among others: changing the way the announcement of the auction of real estate is published;
If the payment deadline is not met third the instalments for which the tax has been distributed or the tax arrears are foreseen to expire the decision to extend to instalments An equivalent solution has been adopted towards.
Transfer of rules on the expiry of a decision granting relief of tax liabilities[15] to Chapter III o.p. which is to enable those provisions to apply also to monetary claims subject to the provisions of that chapter;
Improve the cooperation of the enforcement authority with the liaison body in the recovery of claims by Member States or States third;
Enable automatic access to data from the Register of Public Claims by rightholders and waive the written form of authorisation of a natural person who does not engage in business activities to obtain its data;
Precision of regulations discontinuance of proceedings enforcement - unification of the basis discontinuance of proceedings enforcement both when the enforcement authority acts at the request of the creditor and when it is also a creditor and enforcement authority[16].
It is worth mentioning, however, that the draft amendment described above is currently at the stage of the Government Legislative Centre's arrangements, so its content may still change significantly.
Damian Kuszewski
The author is a graduate of the Warsaw School of Economics in Finance and Accounting, and is currently a law student at SWPS. From 2018 Associated with Russel Bedford Poland. His professional interests are tax law and, in particular, income taxes.
[1] Reasons for the bill
[2] the declaration in question under Article 59(2-4), Article 61 and Article 61a Council Implementing Regulation No
Regulation (EU) 282/2011 dated 15 March 2011 laying down implementing measures Directive 2006/112 on the common system of value added tax (Official Journal of the European Union L, No. 77 to 23 March 2011, p. 1, as amended)
[3] Article 3a(1) u.p.e.a.
[4] Amendment Article 15(3b)(3c), of which it is worth reminding that for the moment of writing an article section 3c It's not in the bill yet. It will only apply from 20 February 2021
[5] Act dated 11 October 2013 on mutual assistance in the investigation of taxes, duties and other monetary claims (i.e. Journal of Laws of 2020, item 765)
[6] Article 27 u.p.e.a.
[7] Amendment Article 26(1g) u.p.e.a.
[8] i.e. a certain moment under Article 26(5)(2) and 3.
[9] Article 26(1e) u.p.e.a.
[10] justification for the bill
[11] Article 1a(17) u.p.e.a.
[12] This change is also reflected In the Act dated 17 November 1964 Code of Civil Procedure (i.e. Journal of Laws of 2020, item 1575 as amended, hereafter: KPC).
[13] Amendment Article 64(4)(5) u.p.e.a.
[14] Article 80(1) u.p.e.a. An equivalent change introduced to the KPC
[15] Article 259 Act dated 29 August 1997 - Tax Ordinance (i.e. Journal of Laws of 2020, item 1325 as amended, Further: p)
[16] Amendment Article 34a u.p.e.a.