The mayor and the tax office will be able to write off the tax

Asked by the editors of DGP to comment on the amendment to the Tax Ordinance, Michał Nielepkowicz, tax adviser, partner at Thedy & Partners, pointed out that, in fact, today, only tax arrears may be written off, i.e. tax not paid on time, which entails the necessity to pay interest for delay and potential fiscal criminal liability. The proposed amendment, which also allows for the remission of tax, and not only tax arrears, may in fact be useful in practice, especially in the case of taxes assessed by tax assessment decisions for individuals, which are paid in instalments – as in the case of property tax, because then, after the delivery of the decision, there is a minimum of 14 days to pay the tax and it will be possible to apply for remission of the tax at one time, instead of having to submit several applications separately for individual instalments.

Will this make the tax authorities more willing to use the institution of remission? I have great doubts about this. Above all because, even today, the remission of tax arrears occurs in extremely rare cases and even the exceptionally difficult life or financial situation of individuals as taxpayers often does not convince the authorities to make such a remission. All the more so as the conditions for remission are to remain unchanged, i.e. important interest of the taxpayer or public interest, which are subject to assessment by the tax authority in each case.

Perhaps after the change, it will be easier to convince the authority and obtain remission due to the fact that there will not yet be accrued interest on arrears, and therefore the amount covered by the decision on remission will simply be smaller. However, whether this will actually be the case – we will only find out in practice.

In this regard, it must also be remembered that remission is a form of state aid, so in the case of entrepreneurs (both individuals and other companies), the tax authorities will still be bound by the rigours of granting state aid. In addition to the de minimis aid limit, each time a tax write-off would therefore have to comply with the assumptions of some aid programme approved by the European Commission.

The last theme quoted in the justification to the draft is also interesting, where the possibility to write off other taxes, primarily VAT and excise duty, is mentioned. In this respect, however, we would like to know a broader justification of the proposed change, because the quoted one is too laconic and does not explain what the authors of the draft have in mind in this respect.

The entire article can be read in Dziennik Gazeta Prawna of 25 August, page B2