Individual tax interpretations – what should you know about them?

What are individual tax rulings?

Tax law does not contain a legal definition of individual tax interpretations. Therefore, to define this institution of tax law, one must refer to the case law of the administrative courts. The Supreme Administrative Court, in a resolution of seven judges dated 7 July 2014, stated that an individual interpretation of tax law provisions can be characterised as a form of external, unilateral action by the tax administration, that is, an act by authorised bodies exercising public administration which does not constitute an authoritative decision and does not settle the matter in terms of the exercise of the tax rights and obligations of the party concerned. (…) It is a non-authoritative act, providing information on the applicable law, or more precisely: on the legitimate possibilities for its application, which is intended to lead to uniformity of application and compliance with tax law, by persuading the public of this and presenting specific proposals in this regard. Individual interpretations are issued by a specialised public administration body – the Director of the National Tax Information Service. An individual interpretation must relate to the (current) factual situation or a future event.

What individual tax interpretations can be obtained?

Pursuant to Article 14b of the Tax Ordinance*, the Director of the National Tax Information Service, at the request of the interested party, issues an interpretation of tax law provisions in their individual case*. Obtaining an interpretation therefore requires the interested party to submit an application for an interpretation, which must include the following information:

• a detailed and comprehensive description of the facts or future event presented in the application;
• the applicant’s question;
• the applicant’s position and its justification.

The Director of the National Tax Information Service has three months to issue an individual interpretation. Article 14o of the Tax Ordinance also provides for a situation where the authority fails to issue the requested interpretation within the above-mentioned time limit – in such a case, it must be deemed that on the day following the expiry of the time limit indicated above, an interpretation was issued confirming the correctness of the applicant’s position in its entirety (this is known as a ‘tacit interpretation’).

An application for an individual interpretation is subject to a fee of PLN 40. Where the application sets out several separate factual situations or future events, in accordance with Article 14f(2) of the Tax Ordinance, a fee in the amount indicated above is charged for each of them (e.g. for two factual situations, a fee of PLN 80 is charged). The applicant may submit the application for an interpretation in the traditional manner (i.e. in person at the National Tax Information Office or by post) or electronically (via the ePUAP platform).

Individual tax interpretations – what are the benefits?

Section 14k of the Tax Ordinance defines the so-called protective function of an interpretation. Under this provision, compliance with an individual interpretation prior to its amendment, a declaration of its expiry, or the service of a copy of a final administrative court ruling overturning the individual interpretation on the tax authority, shall not prejudice the applicant, nor shall it do so if the interpretation is not taken into account in the resolution of a tax matter.

Individual tax interpretations – when will we not obtain them?

The Director of the National Tax Information Service will refuse to issue an individual interpretation if he has reasonable grounds to believe that elements of the factual circumstances or a future event may:

• constitute an act or an element of an act specified in the provisions concerning the anti-avoidance clause (GAAR clause);
• be the subject of a decision issued under measures restricting contractual benefits;
• constitute an abuse of law as referred to in Article 5(5) of the VAT Act.

Furthermore, an interpretation may not be issued if the facts as at the date of submission of the application are the subject of:

• ongoing tax proceedings;
• a tax audit;
• a customs and tax inspection.

The applicant shall submit a declaration in this regard under penalty of criminal liability for making false statements. If the applicant submits a false declaration, the individual interpretation shall have no legal effect (it shall be ineffective).

Individual tax interpretations – key information

In summary, it should be noted that, according to the legislator’s intention, tax interpretations assist in the application of tax law. They indicate the correct application of provisions in the context of a specifically described present (factual situation) or future event. They may help avoid misinterpretation of the provisions, which could result in the initiation of a tax audit. Statistics show that both individuals and legal entities readily make use of this mechanism – according to the Report on the Activities of the National Tax Information Service in 2023, last year alone this body issued 23,234 individual interpretations (the majority of which concerned VAT, PIT and CIT). If you have any doubts regarding the application of the regulations, it is worth making use of this institution of individual tax rulings to avoid unpleasant surprises.

If you are interested in individual tax rulings or wish to seek legal advice on another matter, please contact HWW Hewelt Wojnowski Lindner i Wspólnicy.

Resolution of the Supreme Administrative Court (7w) of 7 July 2014, II FPS 1/14, ONSAiWSA 2015, No. 1, item 3.

Report on the activities of the National Tax Information Service in 2023, Bielsko-Biała, 2024, p. 14