When making a request for a tax interpretation, it is important to be aware of certain specific features of the Polish tax interpretation system. In keeping with them, there are considerable benefits to this system.
After first the individual interpretation only protects the applicant. It is limited only to the person who requests it. The taxpayer may rely on the interpretation in case of problems. On the other hand, if the interpretation of e.g. the taxpayer’s counterparty is followed, such protection will not be granted.
Second, the tax interpretation has no binding effect. According to Polish tax law, individual tax interpretations are not binding on the taxpayer and tax authorities. This also applies to general interpretations which arise in order to indicate the interpretation to be applied by officials.
This is a fundamental weakness of the Polish tax interpretation system. It makes it possible for officials to ignore the interpretations already in force in similar situations when issuing them.
Furthermore, tax interpretations (both general and individual) may be amended by the Minister of Finance if he considers that the interpretations are incorrect.
After third attention should be paid to the different quality of the interpretations. Different tax rulings in similar cases are sometimes issued by tax chambers. This is directly related to the ambiguity of Polish tax laws, which leave too much room for officials to interpret.
As a result, there are sometimes situations where two parties to the same transaction shall submit to the same tax office an application for interpretation of the same problem and officials shall issue two, mutually exclusive interpretations.
Finally, despite these noticeable weaknesses, tax interpretations can strengthen the taxpayer's position in relations with officials, solve his legal and tax problems and secure the proper conduct of business. Therefore, in today's tax interpretation system, it is prudent and safe to apply for tax interpretation.
Author:
Rafał Dąbrowski
Senior Manager in Tax Advisory. Lawyer, tax advisor, restructuring advisor. At Russell Bedford in charge of the Department of Tax Advisory. From 2011 It provides advice to leading companies from various sectors of the economy. In particular, he specializes in consulting the steel, fuel, construction, transport, real estate and IT industries. Speaker of conferences and training on tax law. Author of numerous tax-related articles published in the industry press.