Changes to tax interpretation in Poland planned for 2024 – what implications for businesses?

In June this year, the Ministry of Finance prepared an amendment to the Tax Ordinance, which is to introduce changes concerning, among other things, tax interpretations. The novelties are intended to come into effect from 1 July 2024; the bill is currently undergoing consultation. The biggest changes are to relate to application fees, the validity date of tax interpretations and the way in which applications are to be submitted by professional attorneys and entrepreneurs. Tax interpretations are an important guarantee instrument from the point of view of business entities, so it is worth analysing the planned changes and assessing what impact they will have on the situation of companies in Poland.

New fees for tax interpretations

In the current legal situation, pursuant to art. 14f §1 of the Tax Ordinance, a request for a tax interpretation is subject to a fee of PLN 40, which must be paid within 7 days of filing the request. It is worth specifying that the fee does not strictly refer to one application, but to one factual state or future event included in it. In the project prepared by the Ministry of Finance, Article 14f §1 is to be given a new wording: ,,§ 1.An application for the issuance of an individual interpretation is subject to a fee, determined as at the date of its submission, not exceeding 100% of the minimum wage, however, for applicants who are natural persons not conducting business activity within the meaning of the Act of 6 March 2018. – Entrepreneurs’ Law, shall be subject to a fee not exceeding 1% of the minimum wage. The fee must be paid within seven days of the date of submission of the application.”. This means that the amount of PLN 40 will be removed from the Act, and the fee on applications submitted by will be linked to the amount of the minimum wage. The specific values of the fees will be specified in a Decree of the Minister of Finance. Fees on tax interpretations will be differentiated depending on the entity requesting the interpretation. The planned fees for specific groups are:

for applicants in respect of whom tasks are performed by the Head of the First Mazovian Tax Office in Warsaw – PLN 2,800
for the applicants for whom the tasks are carried out by a head of a tax office other than the locally competent one, except for the applicants referred to in point 1 – PLN 1400
for applicants for whom the tasks are carried out by the head of the tax office with territorial jurisdiction, and for other applicants not listed in points 1, 2 and 4 – PLN 400
for applicants who are natural persons not conducting business activity within the meaning of the Act of 6 March 2018. – Entrepreneurs’ Law and for applicants who are natural persons conducting business activity and who apply for an individual interpretation to the extent not related to business activity – PLN 40.
It is advisable to consult a law firm or a tax adviser who will help determine the correct fee in case of doubt.

When filing an application, entrepreneurs will have to reckon with much higher costs than at present. The increase in rates may cause some entities to give up submitting applications for financial reasons, which in turn will limit access to the guarantee tool of tax interpretations.

Dates of validity of tax interpretations

The bill is also to introduce a complete novelty with regard to interpretations, which will have a validity date from the moment the changes come into force. In the current legal state, this type of solution is not in force. An interpretation is issued indefinitely, and in order to terminate its validity, it is necessary to declare its expiry or revocation on the basis of grounds specified in the legislation. The planned changes provide for a 5-year limitation period. After this time, each interpretation will lose its validity and another fee will have to be paid to extend its life. Its expiry date will not be affected by whether the law remains unchanged, even then a particular interpretation will become obsolete after 5 years. All interpretations issued before 2019 will become time-barred on 1 January 2024. The explanatory memorandum indicates that the timeliness will unify and ensure certainty in the application of tax law. However, this solution also seems to have negative consequences for entrepreneurs, because even in a situation where the legal state will not change, after the indicated period they will be forced to incur further costs related to extending the validity of an individual interpretation.

Manner of filing applications by entrepreneurs and professional attorneys

Further changes provided for in the bill are issues related to the manner of submitting requests for interpretations by the above-mentioned entities. The amendment assumes that entrepreneurs and professional attorneys-in-fact will only be able to submit applications electronically. For this purpose, these entities will be able to use only an electronic delivery address or, if they agree to delivery, an account in the tele-information system of the tax authority authorised to issue an interpretation of the e-office system.

From the point of view of business professionals, this change should be viewed positively. Electronisation in the area of filing applications or communication with the public administration is a major acceleration of the entire procedure.

Summary

The changes planned by the Ministry of Finance for 2024 with regard to tax interpretations will have a major impact on professional entities operating in business. The most serious change for entrepreneurs is related to costs, which will increase significantly. Currently, fees from the application to the issuance of interpretations are relatively affordable, however, this situation will change with the entry into force of the amendment. In addition, interpretations will be subject to a 5-year time limit, the expiry of which will entail further costs. The indicated changes are not yet determined and the bill is at the consultation stage. However, tax interpretations are a useful instrument of protection for entrepreneurs who comply with the content of the obtained interpretation. We encourage you to contact us, our law firm applies for tax interpretations for businesses.