Thedy & Partners analyses the draft amendment to the Tax Ordinance Act: A lot of changes to the statute of limitations are in the pipeline

– The proposed amendments to the Tax Ordinance are, unfortunately, mostly unfavourable to taxpayers and are – in principle – aimed at giving tax authorities additional time to effectively determine tax liabilities or tax losses for taxpayers. In this respect, the draft provides for new premises for suspending the running of the statute of limitations for tax liabilities and for repairing several “defects” in the procedure causing problems for tax authorities in determining tax liabilities for taxpayers before the expiry of the statute of limitations for tax liabilities, assesses Justyna Chylińska, senior consultant at Thedy & Partners.

It is particularly worth noting the new grounds for suspending the limitation period. This is because such a suspension means, in practice, an extension of the period in which a tax liability is due. For example, the draft provides that the initiation of tax proceedings in the case of tax avoidance or the takeover of tax proceedings pursuant to Article 119a et seq. of the Tax Ordinance by the Head of KAS results in the suspension of the running of the limitation period of a tax liability. The course of the suspension period will run again after the delivery of the decision issued pursuant to Article 119a of the Tax Ordinance or measures limiting contractual benefits. As stated in the justification to the draft amendment, such a premise for the suspension of the running of the limitation period of a tax liability is necessary from the point of view of the high degree of complexity of such proceedings.

A new premise for the suspension of the running of the limitation period of a tax liability will also be the initiation of a customs and fiscal control, which may last even for several years.