A bittersweet victory. All taxpayers pay for the incomprehensible stubbornness of the fiscus
After almost a decade of hard struggle, three court-administrative ‘rounds’, countless procedural adversities, we finally WON for our client a case that should in principle NEVER have found its way to the courts.
This is because the case concerned the sale of a monetary claim between entrepreneurs and its taxation on VAT grounds (taxation/exemption), i.e. an indifferent approach – under normal circumstances – to a transaction which, from the perspective of the interests of the State Treasury, should be tax-neutral.
But not in this particular case. Just before the expiry of the limitation period, the authorities questioned our client’s right to deduct, despite having an individual interpretation confirming that this particular transaction was subject to VAT. Of course – in classic fashion – a KKS proceeding was initiated in the case to challenge our Client – already outside the standard limitation period – his right to deduct VAT from this transaction.
After a hard-fought battle, our client finally recovered the ‘tax’ wrongfully ‘enforced’ against him almost 10 years earlier. In such cases, there is also always a statutory obligation to pay interest to compensate the taxpayer for the undue tax collected from him. In this particular case, the interest alone amounted to more than 10 mPLN.
And here the question arises about the limits of the decision-making freedom of individual persons acting on behalf of the tax authority and their personal responsibility for decisions taken – often arbitrary as in the present case. Our client’s case – objectively speaking – was doomed to failure from the very beginning, both in terms of the merits and the process. Nevertheless, the clerical stubbornness lasted for almost a decade! But all the costs of this obstinacy were ultimately borne by all Polish taxpayers. Plus the cost of involving numerous levels of officials/authorities and courts in the case for almost 10 years. And this in a situation where the whole proceeding was, from the outset, a matter of proverbial parsley for the Treasury. There is something systemically wrong here. De lege ferenda.
– This was one of our longest, most procedurally complex cases, requiring extraordinary effort, self-denial and an unwavering – despite adversity – belief in success on the part of both the client and our entire Team. But faith, commitment and perseverance moves mountains. This is how we have always acted, are acting and will continue to act,’ comments Lesław Mazur, partner at Thedy & Partners.