NSA: the title of a transfer can be an expression of intent
A taxpayer's declaration of intent to opt for flat-rate taxation may be expressed in the title of a bank transfer if made in due time, according to the NSA's judgment of 22 February 2024, case file No. II FSK 710/21. Thus, according to the NSA, if the tax payment was made within the statutory deadline, the taxpayer may use the form of taxation of his choice.
Let us remind that in the light of the provisions of the PIT Act, taxpayers may choose the method of taxation of income from non-agricultural business activity on the basis of the flat tax – in that case, they are obliged to submit to the competent head of the tax office a written declaration on the choice of that method of taxation or by making an entry (change) in CEIDG, as a rule by 20 February (with exceptions).
Regular tax payments
In the case decided by the NSA, the taxpayer requested an individual interpretation, indicating that after taking over shares in a limited partnership, he did not submit a declaration on the choice of the flat tax, but regularly paid advances for the flat tax to the account of the tax authority, titling the transfers with the phrase “advances for PIT-36L tax”. The Head of the KIS did not agree with the taxpayer that the appropriately titled transfer of funds constitutes a statement on the choice of the form of taxation because it does not meet the conditions contained in the provisions of the PIT Act. The WSA in Szczecin took a similar view, stating that a transfer of funds is one of the forms of non-cash settlements and therefore cannot constitute a written declaration on the choice of a form of taxation submitted to the head of the tax office.
Written form
In the judgment described above, the NSA pointed out that from 1 July 2021, as a result of amendments to the provisions of the PIT Act and the Lump Sum Act, it is required that the declaration on the choice of the form of taxation be made ‘in writing’, which is not tantamount to the ‘written’ form of the declaration reserved under certain conditions. It is recognised in doctrine that the phrase “in writing” means a documentary form and not a written form, which does not even require a signature to be effective. Thus, the tax regulations use a less stringent form of making declarations of will.
In the NSA’s view, a declaration of intent may be expressed in the title of a transfer by virtue of the fact that it takes the written form, the sender and the addressee are unambiguously identified and, in this sense, it is signed. Thus, due to the fact that in the title of the transfer the taxpayer clearly indicated that the payment concerns an advance payment for PIT-36L and did it within the required time limit, the taxpayer declared that he wants to use this form of taxation and, consequently, made an effective change to the form of taxation.
A positive judgment, but…
The indicated NSA judgment should be assessed positively. It is particularly important for taxpayers who, for various reasons, did not submit a declaration on the change of the form of taxation in the form of a letter to the head of the tax office or through an entry in CEIDG, and at the same time made a transfer of the tax amount with a precise description of the title of the transfer.
Nevertheless, in the event that the position presented by the NSA becomes firmly established in subsequent judgments, taxpayers will have to be cautious in making the transfer for the first settlement period (the month in which the first revenue is earned in the tax year) due to the fact that, as the title of the transfer may be a declaration of intent, in the event of an incorrect description of the title, there may be a risk of an unintentional change in the form of taxation.