Major changes to the Tax Code
In the second half of June, tax consultations started on a bill amending the Tax Code and some other acts: https://www.gov.pl/web/finanse/konsultacje-podatkowe-w-sprawie-zmian-w-ordynacji-podatkowej. The Ministry of Finance informs that the amendment is to simplify tax procedures, increase the effectiveness of tax authorities and make some provisions more precise, in particular those that have been giving rise to doubts so far.
The major changes are as follows:
1. New reasons for suspending the period of limitation for a tax liability (including, without limitation, initiation of customs and fiscal inspection, which may result in instrumental initiation of such inspections, as was seen in the case of fiscal crime proceedings).
2. Cancelling the right of heads of tax offices to carry out tax inspections while extending their powers during verification procedures – this may lead to a situation where the authority will perform tax inspection procedures (a more formalized way of inspecting taxpayers) as part of verification (which is less formal).
3. Changes to private-letter (individual) rulings (e.g. limitation of validity of a ruling to 5 years, obligatory electronic filing of requests by certain entities, the possibility for the Head of National Tax Information to seek an opinion from another body with respect to non-tax regulations, varying the amount of fee for a ruling depending on the status of the requesting party).
4. Introduction of cascading accountability of management board members in a capital company being the general partner in a limited partnership or a limited joint-stock partnership for outstanding payments of such partnerships (if a capital company is the general partner in a limited partnership or a limited joint stock partnership, the members of its management board will also be liable for outstanding payments of the partnership).
5. The possibility to determine a tax liability of a capital company deleted from the register during tax proceedings by a decision on tax liability of management board members for outstanding payments of the company.
6. Introduction of binding classification information (WIK) (it will be possible to get information regarding classification of an entity taxable with income tax or other taxes, or liable to other public-law levies, which is calculated depending on such classification, e.g. according to the Polish Classification of Products and Services (PKWiU) or Combined Nomenclature CN; WIK is to fill in the gap resulting from restrictions on applying for binding rate information (WIS), binding excise information (WIA), binding tariff information (WIT) or binding origin information (WIP)).
7. Introduction of simplified proceedings (a separate, less formalized way of procedure will be introduced for less complex cases, e.g. where the amount of tax liability does not exceed PLN 5,000).
Consultations regarding the amending bill are planned until 31 August 2023. Generally, the changes are to take effect on 1 July 2024. The proposed bill may be changed based on the comments submitted during consultations. We shall keep you informed about any changes to the bill.
Should you have any questions or doubts, you are welcome to contact our experts.