Important NSA resolution: Additional obligation cannot be the subject of a security decision
The NSA has today adopted an important resolution for taxpayers concerning the probability of a taxpayer's conscious participation in a tax fraud within the framework of a so-called carousel (file reference I FPS 1/23).
The legal question considered by the Supreme Administrative Court on 29 May was: “In the course of proceedings aimed at issuing, pursuant to Article 33 § 4(1) in connection with Article 33 § 2(1) of the Tax Ordinance Act of 29 August 1997 (Journal of Laws of 2020, item 1325, as amended), a decision on securing an additional tax liability referred to in Article 112c(1)(2) of the Value Added Tax Act of 11 March 2004 (Journal of Laws of 2020, item 106 as amended), the tax authority is obliged to make it probable that the taxpayer knowingly participated in a tax fraud within the framework of the so-called tax carousel?”.
The NSA analysed the case and the court’s conclusions are broader than expected. According to the NSA, the additional liability cannot be the subject of a security decision. It is more of an administrative sanction and not an obligation. In cases that provide for a 100% sanction, the tax authorities would have to examine the issues of conscious participation in the fraud. Indeed, the principle of proportionality should apply here – a penalty adequate to the offence. The ruling is undoubtedly favourable for taxpayers,” Piotr Kalemba, tax adviser, senior manager cooperating with Thedy & Partners, comments on the NSA ruling warmly.