Tax clarifications and settled interpretation practice – new opportunities for taxpayer protection

On January 1st, 2017, the Law on changes of certain laws aimed at improving legal environment for entrepreneurs came into force

Its basic goal is to simplify and enhance conditions of conducting business activity. The said amendment introduces, inter alia, new institutions to the Tax Code which broaden the scope of protection resulting from the application of the position presented by the Treasury.

Tax clarifications

From January 1st, 2017, the Minister of Finance, as regards the obligation to ensure uniform application of tax law provisions, will ex officio issue so-called tax clarifications (“objaśnienia podatkowe”), afterwards presented in the official gazette Biuletyn Informacji Publicznej.

Unlike the existing general interpretation, which relates mainly to the meaning of tax law provisions of particular concern, tax clarifications will refer to the practical aspects of applying the law.

Settled interpretation practice

 The taxpayers may also benefit from additional protection resulted from application of ‘settled interpretation practice’ (“utrwalona praktyka interpretacyjna”).

This term, under a new law, means clarifications of the scope and conditions for the tax law application which dominate in the individual tax law interpretations of the same legal state or concerning the same future event, and in the same legal state, issued in the settlement period and in 12 months from the beginning of this period.

If in the above mentioned period in the same legal state general interpretations or tax clarifications on the same matter are issued, settled interpretation practice shall be understood as explanations resulting from general interpretation or tax clarification, respectively.

Exclusion from the protection

Taxpayer protection arising from application of tax clarification or settled interpretation practice, as provided for in the amendment, does not apply where the state of facts or a future event which is the subject matter of clarification/settled practice constitute an element of the acts being the subject matter of the decision issued with the application of the clause against tax avoidance or as a consequence of occurring an abuse of the right in the view of the VAT Act.

From when

Provisions regarding taxpayer protection will be applicable to the settlement periods starting from the date the new law entered into force.