Tax rulings in Poland – the wealth or the crisis? PRAHA, 20 SEPTEMBER 2018 Poland – the state of tax rulings uPublic (general) interpretations (rulings) uTax explanations uPrivate (Individual) interpretations (more and more types…) uProtective opinions uAdvance pricing agreements uExcise interpretation uCustoms interpretations (based on EU law) such as binding tariff informations u more, further, faster, record!!!! How it works… uUntil 1.01.2016 uFrom 1.01.2016- KAS Tax Chamber (IS) in Warsaw Tax Chamber (IS) in Bydgoszcz Tax Chamber (IS) in Katowice Tax Chamber (IS) in Poznań Tax Chamber (IS) in Łódź IS’s branch in Torun IS’s branch in Bielsko-Biała IS’s branch in Płock IS’s branch in Leszno Is’s branch in Piotrków Tryb. 16 Chambers of Tax Administration KIS KIS’s branch in Bielsko-Biała KIS’s branch in Ołock KiS’s branch in Leszno KIS’s branch in Piotrków Trybunalski KIS’s branch in Toruń KIS –Headquarter in Bielsko-Biała Why are there so many tax rulings in Poland (until January 1, 2016)? uThe private rulings were (and still are) inexpensive - the fee for issuing a ruling: only PLN 40, (i.e. less than EUR 10) uTaxpayer could ask about all regulations in force in State uIt was possible to repeatedly ask about the same issue uPrivate ruling could be requested even if a general ruling had already existed uThe rulings were not binding on the tax authority but the taxpayer was entitled to file an application for a tax exemption - effective taxpayer’s protection u „Money makes the world go around” uTaxpayer’s ruling cost– 40 PLN uTax administration’s ruling cost– more than 1.000 PLN u uThe possibility of appealing against private rulings (similarly to tax decisions!) uAppealing against ruling - cost for taxpayer (both court instances) -400 PLN (90 EUR) uAppealing - cost for budget? (3 professional judges in first instance + 3 professional judges in the second instance + 2 justifications of judgments = 90 EUR?????) u New forms of "classic" rulings (from 1 January 2016) ujoint interpretation requests made by counterparties urequests for interpretation concerning the actions of potential counterparties (only for entities concluding agreements based on the Public Procurement Act of 29 January 2004) uestablished interpretation practice „Wind of change” - 2016 uNew structure of Polish tax administration (KAS) uRegulating the relationship between individual and general interpretations uGAAR and consequences u Obstructing the receiving of the ruling u1. If the interpretation authority comes to the conclusion that there is a reasonable suspicion that the action described in the request for an individual interpretation may constitute a basis for the application of GAAR, it must seek the opinion of the Head of KAS . u2. If the Head of KAS see „reasonable suspicion”, Director KIS will refuse the issuing of ruling (out of 29,955 requests filed in 2017 the interpretation was refused on these grounds in 650 cases). u3. Taxpayer would apply for protective opinion (20.000 PLN!!!) The taxpayer protection gets weaker u1. The provisions on the protection of the holder of a private ruling do not apply if the actual state or future events which are the subject of the interpretation constitute an element of the operations which are -the subject of a decision issued on the basis of GAAR or -in connection with the abuse of rights within the meaning of the provisions on value added tax. u(article 14na of the Tax Ordinance Act added on 15 July 2016) u2. Sad practice of tax authorities u „the description of the actual state or a future event in the request does not correspond to the actual course of the event” Luxleaks scandal, rulings, unlawful State aid and harmful tax competition uBig business of small State u the Grand Duchy of Luxembourg and its former First Minister and Minister of Finance who did not know anything uPoland is not Luxembourg but everyone must explain themselves Is ruling really necessary for me after 2016? uThank you for your attention u u uProf. UMK Dr hab. Wojciech Morawski uwojciechmorawski.torun@gmail.com uUniversity of Nicolaus Copernicus in Torun uFaculty of Law and Administration