Mateusz Kowalski, a lawyer in the tax team at HWW Law Firm, wrote in December 2021 about the Authority’s flawed practice and another favourable ruling by the administrative court. At that time, he described one of the rulings favourable to taxpayers; however, we can now boast of our own achievement in this matter.
In one of the many cases handled by the Firm concerning an application for an individual tax ruling on the taxpayer’s eligibility for the IP BOX relief, the Authority left the application unexamined during the proceedings and subsequently upheld the contested decision issued at first instance. It based its decision on the finding that the taxpayer had provided a description of the facts containing significant omissions, namely the taxpayer’s failure to state explicitly that the business it conducted constituted research and development activity.
Once again, we encountered in practice the conduct of the Authority, which essentially sought to shift its obligations onto the taxpayer, a practice that has been repeatedly criticised in the case law of the administrative courts. The Law Firm successfully challenged the decisions issued in the case. The court upheld the arguments set out in the appeal, referring to a breach of the provisions of Article 14g(1) of the Tax Ordinance and Article 169(1) and (4) in conjunction with Article 14h of the Tax Ordinance. In line with existing case law, the court once again stated that the authority may not use the summons procedure to compel the taxpayer to include a legal and tax assessment in the statement of facts, in this case the classification of their own business as research-development activity within the meaning of Article 30ca(2) in conjunction with Article 5a(38)-(40) of the Personal Income Tax Act in conjunction with Article 4(2) and (3) of the Law on Higher Education and Science. Despite the extensive body of case law from administrative courts in this regard, the authority continued to reject the position that, where provisions of a tax act refer to the content of other acts, the concept of tax law should be interpreted broadly, i.e. that in such cases the provisions of other acts constitute tax law.
By refusing to issue an interpretation on the basis of the arguments raised in the decisions, the authority contradicted its own established practice, as at the time of issuing the contested decision it had issued numerous individual interpretations in which it assessed and classified the applicants’ activities for tax law purposes on the basis of the aforementioned provisions of the Higher Education Act, having in those cases recognised itself as competent to apply and interpret them.
A different approach, i.e. one which in this respect shifts the burden of assessment onto the taxpayer, contradicts the very essence of individual interpretations, as the entire burden of the proceedings then rests on the taxpayer, who, on the one hand, would have to set out the factual circumstances and then carry out their legal classification, and then, in another part of the application, present their own position again containing the same legal and tax assessment. This would result in a situation where the taxpayer themselves answers the question posed, which would render the participation of the Director of the National Tax Information Service (KIS) in such a case superfluous.
Consequently, the Court set aside the decisions issued in both instances and ordered the Director of the National Revenue Administration to take into account the conclusions contained in the judgment when reconsidering the application.
(Judgment of the Provincial Administrative Court in Gliwice of 8 March 2022, ref. no. I SA/Gl 119/22)
The practice includes ongoing advice on administrative and tax law. He has extensive experience in handling judicial, administrative, tax and judicial-administrative proceedings concerning both individual clients and business entities, including that gained through many years of providing services to local government units and other units of the public finance sector.
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