On 20 June the Finance Ministry published an on-line notice that tax consultations had begun regarding a proposal to amend the Taxes Management Act of 29 August 1997 (“Tax Code”).
The notice was accompanied by a draft law of 13 June 2023 to amend the Tax Code and certain other legislation (“Proposal”).
The Proposal seeks to introduce a number of far-reaching and taxpayer-unfriendly changes in the Tax Code, the most important of which are as follows:
- Private tax rulings would have their validity limited in time, i.e. 5 years from issue date. Also, in accordance with the transitional provision:
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- rulings issued before 1 January 2019 would lose their force on 1 January 2024,
- rulings issued after 31 December 2018 but before 1 January 2024 would lose their force 5 years after issuance.
- The filing fees when applying for private tax rulings would be higher and more diverse.
- Transfer pricing decisions may be issued as partial decisions.
- The period of limitation of tax authorities’ power to enforce tax would be tolled in the event of commencement of a tax and customs inspection.
- The principle of trust in tax authorities would be subject to modifications, one of which being that the tax authorities’ obligation to follow this principle will not limit them in making decisions on the merits.
The Proposal is now during a pre-consultations process which is open to everyone and is expected to continue until 31 August 2023.
Note that according to a post of 4 July 2023 on the official Twitter account of the Finance Ministry, changing the Tax Code had not been officially mentioned in the record of cabinet’s legislative work and the Proposal will not be processed. In contrast, according to the Ministry’s website, the ultimate proposal for changes in the Tax Code will be sent to be legislated by the next Sejm, which means that it is unlikely to become effective as enacted law on 1 January 2024.
We will keep you updated on the fate and further status of the Proposal.
If this issue pertains to your business and you are interested in our assistance, please contact us.
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