Thedy & Partners analyses the draft amendment to the Tax Ordinance: The institution of interpretation will lose its importance

The changes will cover: the date of “validity” of individual interpretations, the amount of the fee, addressing questions to the authorities, limitations on the issuance of individual interpretations and the form of submitting applications.

– Under the proposed changes, an individual interpretation and its changes are to be valid only for 5 years from the date of issue. In order to benefit from the protection afforded by having an individual interpretation, a taxpayer would have to submit another, new application for its issuance. Importantly, transitional provisions provide that individual interpretations already issued will also be subject to a 5-year validity period, with those issued prior to 1 January 2019 to expire on 1 January 2024. It is to be facilitated by the fact that after 5 years, a taxpayer will be able to file a request indicating the reference number of an expired interpretation, without presenting the factual state or future event and his or her own position on their legal assessment,” points out Dawid Charkiewicz, consultant at Thedy & Partners.

Significant changes are being prepared in the fees for the request for an interpretation. Today, such a fee is PLN 40 for a taxpayer for each factual state or future event presented in the request. After the changes, the fee will depend on who submits the request and will vary between 1% of the minimum remuneration and 100% of that amount. Taxpayers covered by the jurisdiction of the MUS in Warsaw will pay PLN 2,800, taxpayers covered by the jurisdiction of an office other than the locally competent one – PLN 1,400, other taxpayers conducting economic activity – PLN 400, natural persons and taxpayers conducting economic activity who submit an application not related to economic activity – PLN 40. The fee for a joint application will be determined as the sum of fees set for individual taxpayers, falling on each of the interested parties.

Of the positive changes, it is worth mentioning the planned introduction of the possibility for the body issuing the interpretation to turn to bodies with specialist knowledge, e.g. the Central Statistical Office (GUS) with respect to activity classification.

– Of the limiting and disadvantageous changes, it should be mentioned that if the factual state or future event presented in the application corresponds to an issue which is the subject of a general interpretation or tax explanations issued in the same legal state, the authority will issue a ruling stating one of the two and will refuse to issue an individual interpretation. Today, such a refusal may take place when the matter in question has already been clarified under the general interpretation. Explanations did not exclude the possibility to obtain an individual interpretation. After the changes, they already will be,” explains Dawid Charkiewicz.

It is also important that professional attorneys-at-law (e.g. advocates, legal advisers, tax advisers), but also companies entered in the National Court Register and entrepreneurs entered in CEIDG, will have to request individual interpretations electronically, if the proposed changes to the Tax Ordinance come into effect.